Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cost of $1,000. One particular carpet cost $5/yard to produce. Annual demand for this style is 120,000 yards. Bryson Mills produces carpet 300 days per year. The production process is most efficient when 4,000 yards/day are produced. Inventory carrying cost is estimated at 20% annually. What should be the production order quantity?
Answer to relevant QuestionsSuppose Bryson develops a production process that is most efficient when 6,000 yards/day are produced at a cost of $4.50/yard. Everything else remains the same. How does this affect the calculation in problem 29? Figure illustrates the analogy of a boat hitting rocks as the level of waterfalls. Why is water a good analogy for inventory? Is the sequence in which rocks are encountered a good way to prioritize inventory reduction ...One lean systems’ consultant has stated that “without standardization, there can be no improvement.” Why? How can a company use the gap model of customer satisfaction to improve its operations management processes? In addition to the information concerning product availability, ABBA collected the following data concerning service performance: Late delivery—6 percent Damage—1 percent Incorrect documentation—4 percent Assuming ...
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