A company is about to begin production of a new product. The manager of the department that will produce one of the components for the product wants to know how often the machine used to pro- duce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. Eighty units will be used daily in assembling the final product. Assembly will take place five days a week, 50 weeks a year. The manager estimates that it will take almost a full day to get the machine ready for a production run, at a cost of $300. Inventory holding costs will be $10 a year. a. What run quantity should be used to minimize total annual costs? h What is the length of a production run in days? c. During production, at what rate will inventory build up? d. If the manager wants to run another job between runs of this item, and needs a minimum of 10 days per cycle for the other work, will there be enough time?
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