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3. A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour

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Problem # 10 - Please see attached.
10. A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 20 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $5 per ton a year. The firm operates 200 days a year. (Note: 1 ton = 2,000 pounds.)
a. How many bags per run are optimal?
b. What would the average inventory be for this lot size?
c. Determine the approximate length of a production run, in days.
d. About how many runs per year would there be?
e. How much could the company save annually if the setup cost could be reduced to $25.00 per run?
3 . A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. How many orders per year will there be? d. Compute the total cost of ordering and carrying flour. e. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? 9 . The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 250 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 300 days a year. Find a. The optimal run size. b. The number of runs per year. c. The length (in days) of a run. 10 . A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 20 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $5 per ton a year. The firm operates 200 days a year. ( Note: 1 ton = 2,000 pounds.) a. How many bags per run are optimal? b. What would the average inventory be for this lot size? c. Determine the approximate length of a production run, in days. d. About how many runs per year would there be? e. How much could the company save annually if the setup cost could be reduced to $25.00 per run? 1 3 . A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Determine
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a. The optimal order quantity. b. The number of o e total cost. 16 . A company will begin stocking remote control devices. Expected monthly demand is 800 units. The controllers can be purchased from either supplier A or supplier B. Their price lists are as follows: Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. Which supplier should be used and what order quantity is optimal if the intent is to minimize tot (Stevenson, William. Operations Management, 11th Edition . McGraw-Hill Learning Solutions, 2011. p. 604). <vbk:0077587952#outline(13.18)>
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Problem # 10 ­ Please see attached.
10. A chemical firm produces sodium bisulfate in 100­pound bags. Demand for this product is 20 tons per day. The capacity for producing the product is 50 tons...

This question was asked on Oct 31, 2011 and answered on Nov 02, 2011.

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