Acme stamping produces seat brackets for a major manufacturer of stadium seating. They sell an average of 65,000 brackets per year. Their stamping machine operates for 8 hours per day, 250 days per year and can produce 150 brackets per hour. It costs them $310 to set up the stamping machine for a production run. The brackets cost $0.47 each to make, and Acme uses 20% of the unit cost to estimate the annual inventory holding cost. Calculate the economic production quantity for seat brackets.

Respuesta :

Answer:

The economic production quantity is 1329 as shown below

Explanation:

Demand=65000 brackets

Production per hour=150 brackets

Production per day=150*8hours=1200 brackets pr day

n=250 days per year

d=Demand per yer/Number of days

d=65000/250

d=260 brackets per day

Set up cost=$350/set up

Cost of bracket=$0.47

Holding cost=20%*$0.47=$0.094

The formula in calculating economic production quantity is :

EPQ=[tex]\sqrt{x}[/tex] 2DS/H*[tex]\sqrt{x}[/tex]P/P-D

EPQ=([tex]\sqrt{x}[/tex]2*65000/0.094)*[tex]\sqrt{x}[/tex]1200/1200-260)

EPQ=1176.001158  *1.129865366

EPQ=1329