Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. She has therefore deter-mined that she will reduce her component lot sizes. She has developed the following data for one component, the safety chain clip:
Annual demand = 31,200 units
Daily demand = 120 units
Daily production ( in 8 hours) = 960 units
Desired lot size ( 1 hour of production) = 120 units
Holding cost per unit per year = $ 12
Setup labor cost per hour = $ 20
How many minutes of setup time should she have her plant man-ager aim for regarding this component?

  • CreatedMarch 20, 2014
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