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A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 25 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $6 per ton a year. The firm operates 200 days a year.
a.How many bags per run are optimal? (Round your answer to the nearest whole number.) 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.)
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.)
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.) e.How much could the company save annually if the setup cost could be reduced to $31 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
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