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Sports Stuff, Inc. (SSI) is a manufacturing firm that produces sporting goods. They have started operating a factory in the U.S. and have opened
Sports Stuff, Inc. (SSI) is a manufacturing firm that produces sporting goods. They have started operating a factory in the U.S. and have opened a company owned store adjacent to the factory. The production manager at the factory is trying to ascertain the optimal number of footballs to produce with each production run. After careful analysis, she believes that the following data are correct: Annual demand is 21,875 footballs per year The store is open 350 days per year The daily production capacity of the factory is 200 units Setup cost incurred to start football production is $25 Annual storage cost per football is $17.50 Lead time is two days Safety stock is 10 footballs Answer the following questions for SSI. a) What is the optimal lot size for football production? (round to 2 decimals) footballs b) What is the minimum inventory level of footballs? footballs c) What is the maximum inventory level of footballs? (round to 2 decimals) footballs d) What is the average inventory level of footballs? (round to 2 decimals) footballs e) What is the reorder point in units? footballs f) What is the annual setup cost for football production? (round to 2 decimals) $ g) What is the annual holding cost for the football inventory? (round to 2 decimals) $
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