Question
In: Operations Management
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other...
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 330 days per year and has annual demand of 53,000 bumpers. They can produce up to 360 bumpers each day. It costs $70 to set up the production line to produce bumpers. The cost of each bumper is $82 and annual holding costs are $29 per unit. Setup labor cost is $26 per hour.
4) Suppose the customer (an auto manufacturer) wants to purchase in lots of 250 and that Bob's Bumpers is able to reduce setup costs to the point where 250 is now the optimal production run quantity. How much will they save in annual holding costs with this new lower production quantity? (Display your answer to two decimal places.)
5) How much will they save in annual setup costs with this new lower production quantity? (Display your answer to two decimal places.)
Please help with questions 4&5. Thank you
Solutions
keosha answered 2 years agoRelated Solutions
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costs $50 to set up the production line to produce bumpers. The
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