Note 1 ton 2000 pounds p 50 tonsday u 20 tonsday 200 daysyr D 20 tonsday x

# Note 1 ton 2000 pounds p 50 tonsday u 20 tonsday 200

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operates 200 days a year. (Note: 1 ton =2,000 pounds) . p = 50 tons/day u = 20 tons/day , 200 days/yr . D= 20 tons/day x 200days/yr. = 4,000 tons/yr S = \$100 H = \$5/ton per yr. p>u
7 Page 565 Economic Production Quantity (EPQ) -Total Cost No. 10/595a. a. How many bags per run are optimal? p = 50 tons/day u = 20 tons/day , 200 days/yr . D= 20 tons/day x 200days/yr. = 4,000 tons/yr S = \$100 H = \$5/ton per yr. bags] [10,328 tons 40 . 516 20 50 50 5 100 ) 000 , 4 ( 2 u p p H DS 2 Q 0 = - = - = b. What would the average inventory be for this lot size? ] bags 8 . 196 , 6 . approx [ tons 84 . 309 ) 30 ( 50 4 . 516 ) u p ( P Q I max = = - = Average is 92 . 154 2 48 . 309 : 2 I max = tons [approx. 3,098 bags] c. Determine the approximate length of a production run , in day Run length days 33 . 10 50 4 . 516 P Q = = d. About how many runs per year would be there?
8 Page 565 Economic Production Quantity (EPQ) -Total Cost d. About how many runs per year would be there? Runs per year: 8] approx. [ 7.75 4 . 516 000 , 4 Q D = = p = 50 tons/day u = 20 tons/day , 200 days/yr . D= 20 tons/day x 200days/yr. = 4,000 tons/yr S = \$100 H = \$5/ton per yr. e. How much could the save annually if the setup cost could be reduce to \$25 per run? If Q = 516.40 tons; S Q D H 2 I max + TC = TC orig . = \$1,549.00 If S=\$25 Q = 258.2 TC rev . = \$ 774.50 Savings would be \$774.50 u p p H DS Q p - = 2 * Pls. check answers
9 Page 571 Reorder Point: Under Certainty ) as units time same (in time Lead LT per week) day, per period, per (units rate Demand where LT ROP d d d = = × = 12.10/571 Next Topic
10 Page 556 ABC Classification System A-B-C approach Classifying inventory according to some measure of importance, and allocating control efforts accordingly A items (very important) 10 to 20 percent of the number of items in inventory and about 60 to 70 percent of the annual dollar value

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• Winter '11
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• Management, Economic Order