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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.)
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