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(Solution) - A manufacturer of fractional horsepower motors for use in industrial

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A manufacturer of fractional horsepower motors for use in industrial sweepers and floor polishers produces its own wiring harnesses. These wiring harnesses are used in final assembly at the rate of 100 per day for 250 working days per year. It costs $250 to start up the wiring harness production. Production is at the rate of 300 per day when operating. The standard cost of a wiring harness is $75, and the company's inventory carrying cost is 25 percent per year.
a. What should the production run quantity be?
b. How long should each production run cycle be?
c. How many times per year should the part be produced?


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This question was answered on: Jul 11, 2017

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