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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 $6 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
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