Economic Order Quantity

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QSO 600

HOMEWORK 4-3: Chapter 3&13 

By

Prasad Madhukar Mathekar

Student ID – 1104094

Submitted to – Jake Clever

Southern New Hampshire University, NH

Problem 03-02

P Chart

Formulas used:

p͞ = total number of defectives/total number of observations

[pic 2] We will be using the z value as 2 instead of 3

The above formulas help us to determine the following:

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The next step is to generate the P chart by developing a table with the following fields:

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A careful analysis of the P chart reveals that the process is OUT of CONTROL. The process defect points have gone beyond the UCL for three consecutive times and the rate at which the defects are occurring is comparatively high.  

Problem 03-06

C Chart

Formulas used:

c͞ = total number of defects/total number of samples

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We now have the below values to build the table for the C chart.

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As all the points in the process are between the UCL and LCL, the process is Under Control.

Problem 13-06

- Optimal production run quantity (Q) 

Production rate R = 116,

set up cost S = $700, holding cost = $9,

annual demand = 6000, daily demand = 6000/260 = 23 cakes,

total number of days = 52 * 5 = 260

Q =  * [pic 10][pic 11]