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Homework Assignment: ENTR 3130 – answers 1. Louisiana Specialty Foods can produce their famous meat pies at a rate of 1650 cases of 48 pies each per day. The firm distributes the pies to regional stores and restaurants at a steady rate of 250 cases per day. The cost of setup, cleanup, idle time in transition from other products to pies, etc., is \$320. Annual holding costs are \$11.50 per case. Assume 250 days per year. a. Determine the optimum production run. b. Determine the number of production runs per year. c. Determine maximum inventory. d. Determine total inventory-related (setup and carrying) costs per year. Answer : (a) 7 . 2024 ) 1650 / 250 1 ( * 5 . 11 320 * 62500 * 2 ) / 1 ( 2 * = - = - = p d H DS Q P or 2025 cases. (b) There will be 62,500 / 2024.7 = 30.87 runs per year. (c) The maximum inventory level is 9 . 1717 1650 250 1 7 . 2024 1 = - = - p d Q units. (d) Total inventory management costs are 09 . 756 , 19 \$ 04 . 9878 04 . 9878 5 . 11 2 9 . 1717 320 7 . 2024 62500 = + = + = TC 2. A printing company estimates that it will require 1,000 reams of a certain type of paper in a

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