A plant manager of a chemical plant must determine the lot size for a particular chemical that has a steadydemand of 30 barrels per day. The production rate is 190 barrels per day, annual demand is 10,500 barrels,setup cost is $200, annual holding cost is $0.21 per barrel, and the plant operates 350 days per year.a. Determine the economic production lot size (ELS).b. Determine the total annual setup and inventory holding cost for this item.c. Determine the time between orders (TBO), or cycle length, for the ELS.d. Determine the production time per lot.What are the advantages of reducing the setup time by 10 percent?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A plant manager of a chemical plant must determine the lot size for a particular chemical that has a steady
demand of 30 barrels per day. The production rate is 190 barrels per day, annual demand is 10,500 barrels,
setup cost is $200, annual holding cost is $0.21 per barrel, and the plant operates 350 days per year.
a. Determine the economic production lot size (ELS).
b. Determine the total annual setup and inventory holding cost for this item.
c. Determine the time between orders (TBO), or cycle length, for the ELS.
d. Determine the production time per lot.
What are the advantages of reducing the setup time by 10 percent?
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