Question: 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.)

1. How many bags per run are optimal?
2. What would the average inventory be for this lot size?
3. Determine the approximate length of a production run, in days.
4. About how many runs per year would there be?
5. How much could the company save annually if the setup cost could be reduced to $25 per run?

Price: $2.99

Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document