Problem 1 EPQ Analysis

D = 18,000 units/year, S = $100 per order, H = $40 per unit per year, p = 120 units per day, and u = 90 units per day.

Find the economic production quantity (EPQ) (round to an integer value) and the total annual cost.

Do the Sensitivity Analysis using the Excel template with Economic Production Quantity for a quantity more than EPQ and less than EPQ.

Problem 2

A firm produces 250,000 each world-class footballs for both domestic and international markets. It can make footballs at a rate of 2000 per day. The footballs are manufactured uniformly over the

whole year. Carrying cost is AED 100 per football annually and Setup cost for a production run is AED 2500. The manufacturing unit operates for 250 days per year. Determine:

1. Optimal Run Size.

2. Minimum total annual cost for carrying and setup cost.

Do the Sensitivity Analysis using the Excel template with Economic Production Quantity for a quantity more than EPQ and less than EPQ.

Problem 3

P=5000 hot dogs per day, u=250 hot dogs per day. The factory operates 300 days per year. S=$66 per order, H=$0.45 per year. Calculate the annual demand. Find the economic production quantity (EPQ) (round to an integer value) and the total annual cost.

Do the Sensitivity Analysis using the Excel template with Economic Production Quantity for a quantity more than EPQ and less than EPQ.

Problem 4

Assembly takes place 5 days a week, 50 weeks a year. It will take a full day to get the machine ready for a production run of the component for the new product. The daily demand is 20,000 units.

S = $300

H = $10.00

p = 200 units/day

u = 80 units/day

D = 5 days/week*50 weeks/year* u = 250 days * 80 units/day = 20,000 units

Note: Round Q_p to an integer value, but round any other values to a maximum of two decimals.

Evaluate the effect of changing Production Quantity on either side of EPQ, analyze the effect, and give your observations.