Ford would like the supplier to reduce their batch size by a factor of four; that is, if the supplier currently produces q parts per batch, toyota would like them to produce q/4 parts per batch. based on what the supplier should modify in order to achieve this result, what must this correctly chosen value (c, h, r, or s) be in order to reduce the batch size by a factor of 4:

Question

Linda Harding

Business

17 July, 11:00

Ford would like the supplier to reduce their batch size by a factor of four; that is, if the supplier currently produces q parts per batch, toyota would like them to produce q/4 parts per batch. based on what the supplier should modify in order to achieve this result, what must this correctly chosen value (c, h, r, or s) be in order to reduce the batch size by a factor of 4:

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Hood · Answer 1

71 units

Explanation:

Demand per month = 1000 (D)

Cost per part to supplier = $100

Annual holding cost to supplier = 25%

Changeover = 4 hours

Cost of Each hour spent on changeover = $250 = Setup cost (S)

EOQ = √{2DS/H}

= √{ (2 * 1000/4 * 250) / 100*0.25}

= 70.7

Modified Batch size = 70.7 = 71 units