Determine the optimal run size

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Your company can produce sausages at the rate of 5,000 per day. You supply these sausages to local estaurants at a rate of 250 per day. the cost to prepare the equipment for producing the sausages is $66 and your annual holding costs are $0.45 per sausage per year. Your company operates 300 days per year.

a. Determine the optimal run size (EPQ)

b. How many runs will you produce a year?

c. How many days does it take to produce the optimal run quantity?

Reference no: EM131736178

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