A chemical firm produces sodium bisulfate in 100-pound bags

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A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 25 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $3 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 answer to the nearest whole number.)

   

  Number of bags

[removed]  

     

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.)

    

  Average inventory

[removed] bags  

   

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.)

   

  Run length

[removed] days  

   

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.)

   

  Run per year

[removed]  

   

e.

How much could the company save annually if the setup cost could be reduced to $29 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

    

  Savings would be

$ [removed]  

 

 

    • 6 years ago
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