LS2631: (a) Determine the optimum batch size for an item production on a manufacturing facility with the following data:

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Question: (a) Determine the optimum batch size for an item production on a manufacturing facility with the following data:

Consumption rate: 500 item /month

Production rate: 1500 item / month

Storage rate: Rs.100 per unit per year,

Set -up charges per batch: Rs.2,000

Interest charges: Rs.50 per unit per year

What is the break-up of annual item cost, set-up cost, and holding cost at the optimum?

(b) Five jobs are to be run on the two processes, all in the sequence of first process 1, than process 2. The duration (in hours) of the operations in indicated in the table below:

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