Determine the approximate length of a production in days

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Reference no: EM131233545

A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 30 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $4 per ton a year. The firm operates 200 days a year. (Note: 1 ton = 2,000 pounds.)

a. How many bags per run are optimal? (Round your answer to the nearest whole number.) Number of bags _____________________

b. What would the average inventory be for this lot size? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Average inventory bags _____________________________

c. Determine the approximate length of a production run, in days. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Run length days ____________________________

d. About how many runs per year would there be? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Run per year _______________________

e. How much could the company save annually if the setup cost could be reduced to $27 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.) Savings would be __________________$

Reference no: EM131233545

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