A chemical firm produces sodium bisulfate in 100-pound bags
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A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 25 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $3 per ton a year. The firm operates 200 days a year. (Note: 1 ton = 2,000 pounds.) |
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a. |
How many bags per run are optimal? (Round your answer to the nearest whole number.) |
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Number of bags
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b. |
What would the average inventory be for this lot size? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) |
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Average inventory
bags
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c. |
Determine the approximate length of a production run, in days. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) |
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d. |
About how many runs per year would there be? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) |
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Run per year
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e. |
How much could the company save annually if the setup cost could be reduced to $29 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.) |
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Savings would be
$
