Item with demand

Demand pr. time unit: 450 units Production rate: 500 units Setup cost: 15 Holding cost per unit and time unit: 0.5

Determine

1. Optimal cycle time
2. What is the cost if you set the cycle time to 1.5
   1. What is the cost increase in relation to the optimal cycle time?

Large group /number of items

• With optimal individual cycle times
• Uniformly distributed over the interval [1,2]
• Average holding and setup cost are equal
• Continuous uniform distribution
• Have probability density function

Same cycle time is to be set for all items.

Determine

3. How big is the smallest relative total cost increase, when using a common cycle time?