BANTUIN PEER ANE GAN !! Production and Operation Management

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Arthur Meiners is the production manager of Wheel-Rite,

a small producer of metal pafts. Wheel-Rite supplies Cal-Tex, a larger

assembly company, with 10,000 wheel bearings each year. This order

has been stable for some time. Setup cost for Wheel-Rite is S40, and

holding cost is $.60 per wheel bearing per year. Wheel-Rite can produce

500 wheel bearings per day. Cal-Tex is a just-in{ime manufacturer

and requires that 50 bearings be shipped to it each business day.

a) What is the optimum production quantity?

b) What is the maximum number of wheel bearings that will be in

inventory at Wheel-Rite?

c) How many production runs of wheel bearings will Wheel-Rite

have in a year'?

d) What is the totai setup + holding cost for Wheel-Rite?