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A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 20 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $5 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 intermediate calculations to 2 decimal places and final 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.)
The product was not patentable because it was too similar to other existing technologies. Major corporations saw his success and have now entered the market with competing products
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The cost of baking a cake is $5 and demand is estimated to be normally distributed with a mean of 30 and a standard deviation of 6. What is the optimal stocking level?
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