In a Single Line Flow, the bottleneck is 10 minutes per unit. This single line flow...

In a Single Line Flow, the bottleneck is 10 minutes per unit. This single line flow is for manufacturing laptops. The manufacturing plant works for 200 days in a year. Workers do only a shift of 8 hours every day. Breaks are excluded from the work time.
The manufacturing unit has a fixed cost of 50,000 per day. The variable cost of making a laptop is 15,000 per laptop. 2% of laptops produced annually are defective and cannot be sold. The manufacturer sells these laptops to the customers at Rs. 40,000 per customer. There are 365 days in a year.
This is a new company and it has one customer. This customer has to determine how many laptops to order from the manufacturing company per order. To do that, the manager has found out the relevant costs. The holding cost of a laptop is Rs. 500 per laptop annually. The order cost of Rs. 1,000 per order. The monthly demand for laptop is an uniform distribution with parameters of 200 units to 800 units per month.
The lead time for delivering an order is normally distributed with mean of 5 days and variance of 4 days2. The demand during the lead time is constant at 5 laptops per day.
a) What is the optimal quantity to order from the manufacturer?
b) To maintain 99% customer service level what should be the safety stock?
c) What is the annual profitability of the manufacturer?

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Expert Solution

Hit like if you get the problem.please let me know If you find any correction for (b) in COMMENT.I am looking for it .
Please Comment for any doubt.Thanking You

orchestra answered 1 year ago

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