A cereal manufacturer makes its own toy-prices, which are then put into its boxes. While the toy price manufacturing process is continuous, the cereal is intermittent flow. Data on the cereal production appears below. Annual demand (D) = 50,000 units Setup cost (S) = $85 per batch Holding cost = $.20 per unit per year Daily subassembly production rate = 1,000 Daily subassembly usage rate=200 (a) To minimize cost, how large should each batch of subassemblies be? (b) Approximately how many days are required to produce a batch? (c) How long is a complete cycle? (d) What is the average inventory for this problem?
