XSpeed Inc Manufactures 29,000 units of its high-end XE bicycles annually. It also manufactures the XE bike frames in its adjacent facility. This facility is capable of producing 160 XE bicycles per day. This facility also produces frames for other models when it is not producing the XE frames. Due to extensive setup time needed for the production changeover, it costs $2,000 every time to setup the XE frame production. The annual costs on holding one XE frame is $25. These production facilities operate 250 days annually.
1. How many units of XE frames should be produced for each production run to minimize the annual holding and setup costs?
a) 2,530 frames
b) 2,450 frames
c) 4,000 frames
d) 2,191 frames
2. What is the total annual setup and holding costs for the XE frames?
a) $20, 000
b) $24,495
c) $27, 386
d) $31,623
3. How long is each production run for the XE frames?
a) 24.5 days
b) 15.8 days
c) 18.3 days
d) 40.0 days
4. What is the time bewteen productions of the XE frames?
a) 56.5 days
b) 50.0 days
c) 31.6 days
d) 40.8 days
5. What is the maximum iiventory level of the XE frames?
a) 1,096 frames
b) 980 frames
c) 1,265 frames
d) 800 frames