What is the optimum production


Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 10,200 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $41, and holding cost is $0.40 per wheel bearing per year. Wheel-Rite can produce 450 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day.

a) What is the optimum production quantity? __ units (round your response to the nearest whole number).

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Operation Management: What is the optimum production
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