Zagazig University 3rd year student
Faculty of Engineering Production Planning & Control - 1st Term
Industrial Engineering Department
Assignment 3– Ch4
Solve the following problems.
Student Name:
Saturday, September 27, 2025
Due: 13/11/2022, Close: 14/11/2022
Q1
4.9) HAL Ltd. produces a line of high-capacity disk drives for mainframe computers.
The housings for the drives are produced in Hamilton, Ontario, and shipped to the
main plant in Toronto. HAL uses the drive housings at a fairly steady rate of 720 per
year. Suppose that the housings are shipped in trucks that can hold 40 housings at
one time. It is estimated that the fixed cost of loading the housings onto the truck
and unloading them on the other end is $300 for shipments of 120 or fewer
housings (i.e., three or fewer truckloads). Each trip made by a single truck costs the
company $160 in driver time, gasoline, oil, insurance, and wear and tear on the
truck.
1. Compute the annual costs of transportation and loading and unloading the
housings for the following policies: (1) shipping one truck per week, (2)
shipping one full truckload as often as needed, and (3) shipping three full
truckloads as often as needed.
2. For what reasons might the policy in part (a) with the highest annual cost be
more desirable from a systems point of view than the policy having the
lowest annual cost?
Solution:
Warning: No cheating – no cooperation
Q2
4.12) A large automobile repair shop installs about 1,250 mufflers per year, 18
percent of which are for imported cars. All the imported-car mufflers are purchased
from a single local supplier at a cost of $18.50 each. The shop uses a holding cost
based on a 25 percent annual interest rate. The setup cost for placing an order is
estimated to be $28.
1. Determine the optimal number of imported-car mufflers the shop
should purchase each time an order is placed, and the time between
placement of orders.
2. If the replenishment lead time is six weeks, what is the reorder point
based on the level of on-hand inventory?
Saturday, September 27, 2025
Zagazig University 3rd year student
Faculty of Engineering Production Planning & Control - 1st Term
Industrial Engineering Department
3. The current reorder policy is to buy imported-car mufflers only once a
year. What are the additional holding and setup costs incurred by this
policy?
Solution:
Warning: No cheating – no cooperation
Q3
4.14) A local machine shop buys hex nuts and molly screws from the same supplier.
The hex nuts cost 15 cents each and the molly screws cost 38 cents each. A setup
cost of $100 is assumed for all orders. This includes the cost of tracking and
receiving the orders. Holding costs are based on a 25 percent annual interest rate.
The shop uses an average of 20,000 hex nuts and 14,000 molly screws annually.
1. Determine the optimal size of the orders of hex nuts and molly screws,
and the optimal time between placement of orders of these two items.
2. If both items are ordered and received simultaneously, the setup cost
of $100 applies to the combined order. Compare the average annual
cost of holding and setup if these items are ordered separately; if they
are both ordered when the hex nuts would normally be ordered; and if
they are both ordered when the molly screws would normally be
ordered.
Solution:
Warning: No cheating – no cooperation
Saturday, September 27, 2025
