Question

A company manufactures hair dryers. It buys some of the components, but it makes the heating element, which it can produce at the rate of 960 per day. Hair dryers are assembled daily, 256 days a year, at a rate of 380 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,100 units.

What is the average inventory of elements, assuming each production cycle begins when there are none on hand?

Average inventory =

Answer 1

634 units

Step-by-step explanation:

Given that,

Produce at the rate, p = 960

Rate of assemble hair dryers per day, d = 380 per day

Batches of units produced, Q0 = 2100

Maximum Inventory:

`=(Q0*(p-d))/(p)`

`=(2,100*(960-380))/(960)`

= 1268.75

Therefore,

Average Inventory = Maximum Inventory ÷ 2

Average Inventory = 1268.75 ÷ 2

= 634.375

= 634 units