An aircraft manufacturer uses 1,000,000 special rivets per year at a uniform rate. The rivets are made on a single-spindle automatic screw machine at the rate of 3,000 per hour. The manufacturing cost is $0.0052 per rivet and the storage cost is estimated to be $0.0008 per rivet per year. The set-up cost is $40 per set-up. Calculate the economic production quantity and the allow- able variation in this quantity for a maximum deviation from the minimum cost of 5%. Assume the machine operates 1,700 hours per year.

An aircraft manufacturer uses 1,000,000 special rivets per year at a uniform rate. The rivets are made on a single-spindle automatic screw machine at the rate of 3,000 per hour. The manufacturing cost is $0.0052 per rivet and the storage cost is estimated to be $0.0008 per rivet per year. The set-up cost is $40 per set-up. Calculate the economic production quantity and the allow- able variation in this quantity for a maximum deviation from the minimum cost of 5%. Assume the machine operates 1,700 hours per year.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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