Uncategorized
Group project Mr.Lawrence Ross White’s Machine Shop is located in Central Trinidad and specializes in designing components for the energy industry in Trinidad and Tobago. Ross Whites machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) i) What is Ross Whites optimal order quantity? (3) ii) What is the companys total annual cost of inventory? (2) b) Ross White wants to re-consider his decision of buying the brackets and is considering making the brackets in-house. He has determined that set-up cost would be $25 in machinist time and lost production time. Ross estimates that the cost (including labor time and materials) of producing one bracket would be S 14.80, and that holding cost will be 10% of this cost. i) What is Ross Whites optimal production quantity? (3) ii) If Ross White uses t
Group project Mr.Lawrence Ross White’s Machine Shop is located in Central Trinidad and specializes in designing components for the energy industry in Trinidad and…