changeover cost

Project Description:

buckeye manufacturing produces heads for engines used in the manufacture of trucks. the production line is highly complex, and it measures 900 feet in length. two types of engine heads are produced on this line: the p-head. the p-head is used in heavy- duty trucks and the h-heads is used in smaller trucks. because only one type of head can be produced at a time, the line is set up to manufacture either the p-head or the h-head, but not both. changeovers are made over a weekend; costs are $500 in going from a setup fro the p-head to a setup for the h=head, and vice versa. when set up for the p-head, the maximum production rate is 80 units per week.
buckeye just shut down for the week after using the line to produce the p-head. the manager wants to plan production and changeovers for the next eight weeks. currently, buckeye's inventory consists of 125 p=heads and 143 h-heads. inventory carrying costs are charged at an annual rate of 19.5 percent of the value of inventory. the production cost for p-head is $225, and the production cost for h-head is $310. the objective in developing a production schedule is to minimize the sum of production costs, plus inventory carrying costs, plus changeover cost.
buckeye received the following requirements schedule from its customer ( an engine assembly plant) for the next nine weeks.

production demand
weeks p-head h-head
1 55 38
2 55 38
3 44 30
4 0 0
5 45 48
6 45 48
7 36 58
8 35 57
9 35 58
safety stock requirements are such that wee-ending inventory must provide for at least 80 percent of the next week's demand.
Skills Required:
Project Stats:

Price Type: Negotiable

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