Assignment Ch12(c) The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a.

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Presentation transcript:

Assignment Ch12(c) The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a steady rate of 50 per day. u = 50. Coupling can be produced at rate of 200 per day. p=200. Annual storage cost is $1 per coupling, H=1, and machine setup cost is $35 per run, S=35. Since there are 220 days per year and u is equal to 50, therefore yearly demand is 50(220), D= 11000 Determine the economic run size. Approximately how many runs per year will there be? Compute the maximum inventory level. Determine the cycle time, run time and pure consumption time. Compute the total cost

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The Problem The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a steady rate of 50 per day. u = 50. Coupling can be produced at rate of 200 per day. p=200. Annual storage cost is $1 per coupling, H=1, and machine setup cost is $35 per run, S=35. Since there are 220 days per year and u is equal to 50, therefore yearly demand is 50(220), D= 11000 Determine the economic run size. Approximately how many runs per year will there be? Compute the maximum inventory level. Determine the cycle time, run time and pure consumption time. Compute the total cost

EPQ and # of Runs u =50, p=200, H=1, S=35, D= 11000 Determine the economic run size. Approximately how many runs per year will there be? D/Q = 11000/1013 = 10.85

Run Time How much do we produce each time? Q How long does it take to produce Q? d1 What is our production rate per day? p Run Time? Q = pd1  1013 = 200d1 d1= 1013/200 = 5.06 p-u u I max d1 d2

Maximum Inventory Maximum Inventory ? At what rate inventory is accumulated? p-u For how long? d1 What is the maximum inventory? IMax IMax = (p-u)d1 IMax = (200-50)(5.06) = 759 p-u u I max d1 d2

IMax Pure Consumption Time What is the Maximum inventory? How long does it take to consume IMax ? d2 At which rate Imax is consumed for d2 days u Imax = ud2 759 = 50d2 d2 = 15.18 p-u u I max d1 d2

Cycle Time, Total Cost Cycle Time ? d1 + d2 = 5.06 + 15.18 = 20.24 TC = H(IMax/2) + S(D/Q) TC = 1(759/2) + 35 (11000/1013) TC = 379.5 + 379.5 = 759