Question: Hitch H is the 1 - 1 / 4 inch, heavy duty with extender, natural hitch. After discussions with the production manager, Simone has come
Hitch H is the inch, heavy duty with extender, natural hitch.
After discussions with the production manager, Simone has come to realize that her assumption on EOQ is not appropriate. Since EOQ is designed for situations where all of the inventory shows up all at once, which would often be the case for a purchased items and in some cases for manufactured items when everything must move forward as a full batch, and the situation here is that each item may move into inventory as soon as it comes out of production without waiting for the other items EOQ with gradual deliveries sometimes called Economic Run Length ERL or Economic Production Quantity EPQ among other things would be more appropriate.
The forecast annual demand for next year of Hitch H is and the current batch size is units. It takes hours to produce each Hitch H The setup time is hours per setup conducted by a single operator with no other setup costs incurred. The holding cost is $ per unit per year. Production and demand both occur days per year. The facility operates hours per day.
First, determine the recommended batch size using EOQ with Gradual Deliveries ERL EPQ and then determine how many days a batch will take to sell given the current demand per day.
Hint: This isn't in the book, it is discussed in Canvas.
Don't round any numbers in the middle of the problem. Provide your answer to two decimal places.
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