A soap manufacturer makes several different detergents using same equipment for all of them. It costs $ 1000 to clean the equipment and to prepare it for a run of a given detergent. A particular detergent has a demand rate of 100 tons per month. This can be considered to be deterministic. The variable production cost of one ton is $200. The firm uses an inventory carrying charge of 1 = 0.17. What is the optimal quantity to produce per run if no stockouts are to be allowed? What is the time between runs?

A soap manufacturer makes several different detergents using same equipment for all of them. It costs $ 1000 to clean the equipment and to prepare it for a run of a given detergent. A particular detergent has a demand rate of 100 tons per month. This can be considered to be deterministic. The variable production cost of one ton is $200. The firm uses an inventory carrying charge of 1 = 0.17. What is the optimal quantity to produce per run if no stockouts are to be allowed? What is the time between runs?

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...

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