Emarpy Appliance is a company that produces all kinds of major appliances. Bud Banis, the president of Emarpy, is concerned about the production policy for the company's best-selling refrigerator. The annual demand for this has been about 8250 units each year, and this demand has been constant throughout the year. The production capacity is 130 units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $54 per year. The current production plan calls for 390 refrigerators to be produced in each production run. Assume there are 250 working days per year.
What is the daily demand of this product? units (enter your response as a whole number).
If the company were to continue to produce 380 units each time production starts, how many days would production continue (enter your response as a whole number).
Under the current policy, how many production runs per year would be required? (round your response to the nearest whole number).
What would the annual setup cost be (round your response to the nearest whole number).
If the current policy continues, how many refrigerators would be in inventory when production stops units (round your response to the nearest whole number).
What would the average inventory level be? units (round your response to the nearest whole number).
If the company produces 380 refrigerators at a time, what would the total annual setup cost and holding cost be $ (round your response to the nearest whole number).
If Bud Banis wants to minimize the total annual inventory cost, how many refrigerators should be produced in each production run (round your response to the nearest whole number).
How much would this save the company in inventory costs compared to the current policy of producing 380 units in each production run $ (round your response to the nearest whole number).