Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A chemical plant produces sodium bisulfate in 150kg bags. Demand for this product is 26 tonnes per day. The capacity for producing this product is
A chemical plant produces sodium bisulfate in 150kg bags. Demand for this product is 26 tonnes per day. The capacity for producing this product is 55 tonnes per day. Setup cost is $400, and holding cost is $190 per tonne per year. The company operates 250 days a year. (Note: 1 tonne =1,000kg ) a. What is the optimal number of bags per production run? (Round your intermediate colculations to 2 decimal ploces and the final answer to the nearest whole number.) Optimal number of bags b. What would the average inventory level be for this lot size? (Round your intermediate calculations to 2 decimol ploces and the final answer to the nearest whole number.) Average inventory bags c. Determine the approximate length of a production run, in days. (Round the intermediate calculations ond final onswer to 2 decimal places.) Run length days d. About how many production runs per year would there be? (Round your intermediate colculations to 2 decimal places and the final answer to 1 decimal place.) Runs per year e. How much could the company save annually in inventory control cost if the setup cost could be reduced to $200 per production run and the optimal production quantity is recalculated and used? (Round the intermediate calculations and final onswer to 2 decimal ninres 1 e. How much could the company save annually in imventory control cost if the setup cost could be reduced to $200 per production run and the optimal production quantity is recalculated and used? (Round the intermediate colculations and final onswer to 2 decimal ploces.) Annual Savings $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started