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Two material handling options are being considered for connecting two work centers. A conveyor can be purchased and operated for an annual cost of $275,000. The conveyor can transport containers that hold up to 8 units. The alternative is a forklift/pallet system that would cost $85,000 per year plus $1.65 per move. The pallets can hold up to 16 units each. The facility expects to manufacture 1,300,000 parts per year. Annual inventory holding cost is $5 per unit of WIP. Select the best container size and material handling option for this production system.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92596781

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