A company that produces hair dryers buys some of the components, but it makes the heating element, which it can produce at the rate of 800 per day. Hair dryers are assembled daily, 250 days a
year, at a rate of 300 per day. Because of the disparity between the production and usage rates, the
heating elements are periodically produced in batches of 2,000 units.
a. Approximately how many batches of heating elements are produced annually?
b. If production on a batch begins when there is no inventory of heating elements on hand, how
much inventory will be on hand two days later?
c. What is the average inventory of elements, assuming each production cycle begins when there
are none on hand?
d. The same equipment that is used to make the heating elements could also be used to make
a component for another of the firm’s products. That job would require four days, including
setup. Setup time for making a batch of the heating elements is a half day. Is there enough time
to do this job between production of batches of heating elements? Explain.