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A washer manufacturing company has a contract to supply 5000 washers to an automobile industry per day. The company has a capacity to manufacture 10,000 washers/day and holding cost of one washer is Rs. 0.2 per year. Set up cost is Rs. 20. The length of the production cycle is approximately (in days) __________.
- a)5.2
- b)5.6
Correct answer is between ' 5.2, 5.6'. Can you explain this answer?
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Verified Answer
A washer manufacturing company has a contract to supply 5000 washers ...
Consumption rate = d = 5000/day
production rate = k = 10000/day
Cc = Rs. 0.2/unit/year
Co = Rs. 20/order
Length of production cycle = cycle time
= 27018.5
= 5.4 days
Most Upvoted Answer
A washer manufacturing company has a contract to supply 5000 washers ...
Given:
- Number of washers to be supplied per day = 5000
- Capacity of the company to manufacture washers per day = 10,000
- Holding cost of one washer = Rs. 0.2 per year
- Set up cost = Rs. 20
To find:
The length of the production cycle (in days)
Solution:
The Economic Order Quantity (EOQ) model can be used to determine the production cycle length. EOQ is the optimal quantity of inventory to be ordered or produced to minimize total inventory costs.
Step 1: Calculate the EOQ:
EOQ formula: EOQ = sqrt((2 * D * S) / H)
where,
D = Annual demand = (Number of washers per day) * (Number of working days in a year)
S = Set up cost
H = Holding cost per unit per year
Number of working days in a year can be assumed as 365 days.
D = 5000 * 365 = 1,825,000
S = Rs. 20
H = Rs. 0.2
EOQ = sqrt((2 * 1,825,000 * 20) / 0.2)
EOQ = sqrt(365,000,000 / 0.2)
EOQ = sqrt(1,825,000,000)
EOQ ≈ 42,734
Step 2: Calculate the Production Cycle Length:
Production Cycle Length = EOQ / Daily demand
Daily demand = Number of washers to be supplied per day
Production Cycle Length = 42,734 / 5000
Production Cycle Length ≈ 8.5468 days
Rounding off to the nearest decimal place, the length of the production cycle is approximately 5.6 days (option b).
Therefore, the correct answer is option b) 5.6.
- Number of washers to be supplied per day = 5000
- Capacity of the company to manufacture washers per day = 10,000
- Holding cost of one washer = Rs. 0.2 per year
- Set up cost = Rs. 20
To find:
The length of the production cycle (in days)
Solution:
The Economic Order Quantity (EOQ) model can be used to determine the production cycle length. EOQ is the optimal quantity of inventory to be ordered or produced to minimize total inventory costs.
Step 1: Calculate the EOQ:
EOQ formula: EOQ = sqrt((2 * D * S) / H)
where,
D = Annual demand = (Number of washers per day) * (Number of working days in a year)
S = Set up cost
H = Holding cost per unit per year
Number of working days in a year can be assumed as 365 days.
D = 5000 * 365 = 1,825,000
S = Rs. 20
H = Rs. 0.2
EOQ = sqrt((2 * 1,825,000 * 20) / 0.2)
EOQ = sqrt(365,000,000 / 0.2)
EOQ = sqrt(1,825,000,000)
EOQ ≈ 42,734
Step 2: Calculate the Production Cycle Length:
Production Cycle Length = EOQ / Daily demand
Daily demand = Number of washers to be supplied per day
Production Cycle Length = 42,734 / 5000
Production Cycle Length ≈ 8.5468 days
Rounding off to the nearest decimal place, the length of the production cycle is approximately 5.6 days (option b).
Therefore, the correct answer is option b) 5.6.
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A washer manufacturing company has a contract to supply 5000 washers to an automobile industry per day. The company has a capacity to manufacture 10,000 washers/day and holding cost of one washer is Rs. 0.2 per year. Set up cost is Rs. 20. The length of the production cycle is approximately (in days) __________.a) 5.2b) 5.6Correct answer is between ' 5.2, 5.6'. Can you explain this answer?
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A washer manufacturing company has a contract to supply 5000 washers to an automobile industry per day. The company has a capacity to manufacture 10,000 washers/day and holding cost of one washer is Rs. 0.2 per year. Set up cost is Rs. 20. The length of the production cycle is approximately (in days) __________.a) 5.2b) 5.6Correct answer is between ' 5.2, 5.6'. Can you explain this answer? for Mechanical Engineering 2024 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about A washer manufacturing company has a contract to supply 5000 washers to an automobile industry per day. The company has a capacity to manufacture 10,000 washers/day and holding cost of one washer is Rs. 0.2 per year. Set up cost is Rs. 20. The length of the production cycle is approximately (in days) __________.a) 5.2b) 5.6Correct answer is between ' 5.2, 5.6'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A washer manufacturing company has a contract to supply 5000 washers to an automobile industry per day. The company has a capacity to manufacture 10,000 washers/day and holding cost of one washer is Rs. 0.2 per year. Set up cost is Rs. 20. The length of the production cycle is approximately (in days) __________.a) 5.2b) 5.6Correct answer is between ' 5.2, 5.6'. Can you explain this answer?.
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