Determine the approximate length of a production

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Reference no: EM13746470

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 $3 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 $29 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Savings would be $

Reference no: EM13746470

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