What would the average inventory be for this lot size

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Reference no: EM133300818

Assignment:

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 250 days a year. (Note: 1 ton= 2,000 pound).

a. How many tons per run are optimal?

b. What would the average inventory be for this lot size?

c. Determine the approximate length of a production run, in days.

d. How much could the company save annually if the set-up cost could be reduced to $50 per run?

Reference no: EM133300818

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