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How does set up costs and raw material handling costs reduce when batch size decreases?
wont we have to set up more and spend more behind raw material handling when we have more batches?
so how does it increase?
thank you sirSorry, but I don’t really understand what you have written – you ask how the costs reduce in the first line, but then ask how they increase.
Have you watched my free lectures on just-in-time ?
The question is:
which of the 2 costs is likely to increase if just in time manufacturing is introduced?
1 – setup
2 – raw material handling
3 – raw material storage
4 – customer order costsanswer is 1 and 2
the answer is given as:
costs mentioned in 1 and 2 are likely to increase as batch sizes get smaller, the whole aim of JIT is to hold no inventorywhat I don’t understand is:
How does set ups and raw material handling costs increase when batch size gets smaller?
with smaller sizes of batches, won’t my handling and set ups costs be lower? yet the answer says that the setup costs and raw material handling costs increase as batch size decreases.or in other words, how does setup costs and raw material handling costs increase when batch size decreases?
i hope the question is clear now.
thank you as always
🙂If the batch size is smaller then given they will be producing the same total over the year, it will mean more batches being produced and therefore the cost of setting up machines to produce the batches will increase in total over the year.
As far as material handling is concerned, there will be more deliveries of materials being received if the are receiving smaller quantities each time. This will mean more time spent by the people checking in materials over the year, and therefore the cost of the raw material handling over the year will increase.
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