Question
I have the right solutions for thoses questions but i need to know how to calculate it! The bold answer is the correct one. The
I have the right solutions for thoses questions but i need to know how to calculate it! The bold answer is the correct one.
The production manager of a chemical plant is responsible for the production of Raw Material A. Raw Material A has a steady demand of 30 barrels per day or a total of 10,500 barrels peryear. The production capacity of the plant is 190 barrels per day. The plant is operational during 350 days per year. The set-up costs for one product change are CHF 200. The annual storage costs are CHF 0.21 per barrel. No safety stock is kept.
a) Calculate the optimal batch size for the production of Raw Material A. A. 816 barrels B. 890 barrels C. 4472 barrels D. 4854 barrels E. 4873 barrels
b) For a second Raw Material B, you have calculated an optimal batch size of 4,500 barrels. The annual demand is 45,000 barrels. The production output is 450 barrels per day. How many production days are there between the end of the last and the start of the next production run? A. 10 days B. 15 days C. 20 days D. 25 days E. 35 days
c) The company manages to reduce the storage costs for Raw Material A by 10% and the setup costs for Raw Material B by 20% through optimization measures. How do the optimal batch sizes of the two raw materials change? A. Both batch sizes are reduced. B. The batch size for A increases while it decreases for B. C. The batch size for B increases while it decreases for A. D. Both batch sizes increase. E. This does not result in any changes to the batch sizes.
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