6. 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? b. What would the average inventory be for this lot size? c. Determine the approximate length of a production run, in days. d. About how many runs per year would there be? e. How much could the company save annually if the setup cost could be reduced to $25 per run?

6. 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? b. What would the average inventory be for this lot size? c. Determine the approximate length of a production run, in days. d. About how many runs per year would there be? e. How much could the company save annually if the setup cost could be reduced to $25 per run?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

Which types of data are present in inventory records?
please give me only the answer no explantion is needed Question 4 To what does the following relate: Before a purchase of inventory can be made, it has to be authorized and supported by all relevant supporting documentation. 1. Monitoring of controls 2. Validity of transactions 3. Inherent limitations- cost vs benefit 4. Inherent limitations – human error, time constraints Question 5 To what does the following relate: Although the barcoding system in the warehouse is outdated and ineffective, the company cannot see the benefit in upgrading the system based on the high cost of the system. 1. Control environment 2. Inherent limitations – cost vs benefit 3. Validity of transactions 4. Control activities – independent checks and reconciliations Question 6 One of the six areas that an auditor needs to consider when obtaining an understanding of the entity is 1. Skills and competence of the audit…
The average days account receiveable/ days of inventory?
Question 1: What are the primary reasons for holding inventory?
please solve b part only
What type of inventory are groceries?
What are the procedures for completing an office inventory of supplies and equipment? How could you create an office policy for inventory? Include ideas for an inventory schedule, how you would distribute tasks among staff members, and what tools you would need to create to accomplish these tasks.
What are 3 examples of cash controls and 3 of inventory controls?
Define and discuss the need for a perpetual inventory record?
What is ABC inventory system?
Explain the significance of ABC Analysis for managing inventory.
Describe the advantages of cycle counting over anannual physical inventory.