Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost $20 per hour Annual holding cost $15 per unit Daily production 976 units/8 hour day Annual demand 36,000 (250 days each×daily demand of 144 units) Desired lot size 122 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = nothing minutes (round your response to two decimal places).
Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost $20 per hour Annual holding cost $15 per unit Daily production 976 units/8 hour day Annual demand 36,000 (250 days each×daily demand of 144 units) Desired lot size 122 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = nothing minutes (round your response to two decimal places).
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip:
|
Setup labor cost
|
$20
per hour |
|
Annual holding cost
|
$15
per unit |
|
Daily production
|
976
units/8 hour day |
|
Annual demand
|
36,000
(250
days
each×daily
demand of
144
units) |
|
Desired lot size
|
122
units (one hour of production) |
To obtain the desired lot size, the set-up time that should be achieved =
nothing
minutes (round your response to two decimal places).Expert Solution
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