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 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...
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![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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb9ab223b-042c-4151-ba18-ccd20059ad5a%2Fb3fcd8ba-c10c-420b-8a59-d547ba854a87%2F3q9qt7e_processed.png&w=3840&q=75)
Transcribed Image Text: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?
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