Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Ashlee’s Beach Chairs Company produces upscale beach chairs. Annual demand for the chairs is estimated at 18,000 units. The frames are made in batches before the final assembly process. Ashlee’s final
assembly department needs frames at a rate of 1500 per month. Ashlee’s frame department can produce
2500 frames per month. The setup cost is $800, and the annual holding cost is $18 per unit. The company operates 20 days per month. Lead time is 5 days. Determine the optimal order quantity, the total
annual costs, and the reorder point.
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