What is the optimal production lot-size

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Reference no: EM13961269

Kellam Images prints snack food bags on long rolls of plastic film. The plant operates 250 days a year. The daily production rate is 6,000 bags and the daily demand is 3,500 bage sold at $2 each. The cost to set up the design for printing is $300. The holding cost is estimated at 1% of the price of a bag per day. Show your work.

A) What is the optimal production lot-size (economic production quantity, EPQ)?

B) What is the optimal number of production runs per year (optimal production frequency)?

C) What is the optimal time between set-ups (optimal cycle time) in days?

D) Find the optimal (minimum) total cost.

E) Find the optimal maximum inventory.

F) Find the optimal average inventory.

Reference no: EM13961269

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