$35.00 $25.00
Operation |
assembling. |
Pollution control |
Reducing lead times |
Interest |
Computer-aided manufacturing (CAM) |
gross requirements – amount on-hand – scheduled receipts. |
pegging. |
It is a batch-type system that is periodically updated. |
pegging. |
Approximately 10 percent of demand during lead time will be satisfied. |
master production schedule. |
60 units |
utilization. |
40% |
0 hours |
1-B, 2-C, 3-A |
Factor Old System New System
Output 60 60(1.25) = 75
# of workers 5 6
Worker cost $12/hr $12/hr
Material $16/unit $10/unit
Overhead 1.6(labor cost) 1.6(labor cost)
Price 31 31
If instantaneous replenishment is assumed when given the same demand, setup/ordering costs, and carrying costs, then the EOQ calculated using incremental replenishment will be greater than EOQ.