Toysplus Inc.

1. Economic line of battle quantities calculations:

In this case study, I use POQ to get Optimal Quantities to Order because some the parts are make by companys plastic-molding machines in an assembly operations and units can be assumed that are received incrementally during out(p)turn. We also arrive the by- specify assumptions:

- Only one item is involved because each cause of shrink from has its own assembly line, only one toy can be assembled at a time on this line.

- Annual Demand is known

- Usage rate is constant

- Usage occurs continually but production occurs periodically

- The production rate is constant ( i.e. production rate of Toy Auto is 3500, Toy Truck, 1750; Toy Robot, 2333)

- thither are no quantity discounts

Thus, we have to find out the Set up bell, Holding comprise, Demand per year, Demand per workweek and production rate.

Therefore, we have

Ø Set up equal:

According to the case study, we have the shop labor rate is the sum of $6 per mo for wages, 33% fringe benefits and $6 per hour charged for overhead. Moreover, line 1 has 10 workers who engage in assembly. Thus, the setup cost is:

S = 1 hour * 10 workers * ( $6 wages + 0.



33*6 benefits+ $6 overhead )

= $140

Ø Holding Cost:

There is some ambiguity here. The subcomponent costs in Exhibit 4 do non always add up to the Cost Each (e.g. the cost for Auto is $3.9) which is level 0 item cost. So I assumed that Line 1 labor costs (at a fully burdened $6 + 0.33*6 + $6 = $ 14 per hour) were not included.

Hence, Item Cost per unit is the sum of Cost Each Item and the labor cost per item. You can limit the results of Item Cost...

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