A particular product is produced on a fabrica- tion line. Using the finite replenishment EOQ model,...

 

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A particular product is produced on a fabrica- tion line. Using the finite replenishment EOQ model, the suggested run quantity is 1,000 units. On a particu- lar day of production, this item is being run near the end of a shift and the supervisor, instead of stopping at 1,000 units and having to set up for a new item (which would make her performance look bad in terms of total output), continues to produce the item to the end of the shift, resulting in a total production quantity of 2,000 units. Discuss how you would analyze whether or not she made a decision that was attractive from a company standpoint. Include comments on possible intangible factors. A particular product is produced on a fabrica- tion line. Using the finite replenishment EOQ model, the suggested run quantity is 1,000 units. On a particu- lar day of production, this item is being run near the end of a shift and the supervisor, instead of stopping at 1,000 units and having to set up for a new item (which would make her performance look bad in terms of total output), continues to produce the item to the end of the shift, resulting in a total production quantity of 2,000 units. Discuss how you would analyze whether or not she made a decision that was attractive from a company standpoint. Include comments on possible intangible factors.

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