Problem NO: 6

Current setup time on a certain machine is 3.0 hr. Cost of downtime on this machine is estimated at\n$200/hr. Annual holding cost per part made on the

Current setup time on a certain machine is 3.0 hr. Cost of downtime on this machine is estimated at

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$200/hr. Annual holding cost per part made on the equipment, Ch = $1.00. Annual demand for the

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part is 15,000 units. Determine (a) EOQ and (b) total inventory costs for this data. Also, determine

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(c) EOQ and (d) total inventory costs, if the changeover time could be reduced to six minutes.

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