Flemming Accessories Practice Exercise Mngmt Sci PDF

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ExerciseFlemming Accessories produces paper slicers used in offices and in art stores. The minislicer has been one of its most popular items. Annual demand is 6,750 units and is constant throughout the year. Kristen Flemming,owner of the firm, produces the minislicers in batches. On average, Kristen...

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Exercise #1 Flemming Accessories produces paper slicers used in offices and in art stores. The minislicer has been one of its most popular items. Annual demand is 6,750 units and is constant throughout the year. Kristen Flemming,owner of the firm, produces the minislicers in batches. On average, Kristen can manufacture 125 minislicers per day. Demand for these slicers during the production process is 30 per day. The setup cost for the equipment necessary to produce the minislicers is $150. Carrying costs are $1 per minislicer per year and lead time is 5 days. Determine the following: D = 6,750 d = 30 P = (125 x 225) = 28,125 p = 125 Co = 150 Ch = 1 m=5 Annual Operating Period = (6,750/30) = 225

a. Minimum cost production lot size

Q* =

Q* =

√ √

(2 DCo) d 1−( )(Ch) p

( 2) (6,750 x 150) 30 )(1) 1−( 125

√

2,025,000 0.76 Q* = √ 2,664,473.68 Q* = 1,632.32 minislicers Q* =

b. Number of production runs per year

Q∗¿ D ¿ 6,750 No. of production runs per year = 1,632.32 No. of production runs per year = 4.14 production times No. of production runs per year =

c. Cycle time

Cycle Time (T) = Cycle Time (T) = Cycle Time (T) = Cycle Time (T) =

Annual operating period x Q∗¿ ¿ ¿ ¿ (225 x 1,632.23) 6,750 (367,251.75) 6,750 54.41 days∨54 days

d. Length of a production run Length of Production =

Length of Production =

Q∗¿ p ¿ 1,632.23 125

Length of Production =

13.06∨1 3

e. Maximum inventory d ¿ ¿ Q* p 30 )) (1,632.23) Maximum Inventory = (1-( 125

Maximum Inventory = (1-(

Maximum Inventory = 0.76 x 1,632.23

Maximum Inventory = 1,240.49 minislicers

f. Total annual cost Total Cost =(

Q∗¿ (Q∗xCh) ((1-(d/p)) DCo ¿¿ +¿ 2 ¿

1,632.23 x (1) ¿ ¿ Total Cost = ( 30 6,750 x 150 ¿+ 1− 1,632.23 125 Total Cost = 620.32+¿ 620.25 Total Annual Cost = 1,240.57

( ( ))

g. Reorder point Reorder Point = dm Reorder Point = 30 x(5) Reorder Point = 150

¿...