14 Aug operations management
Problem 13-6
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A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month. |
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How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.) |
Problem 13-9
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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 280 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 297 days a year. |
| a. |
Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.) |
| Optimal run size | [removed] |
| b. |
Find the number of runs per year. (Round your answer to the nearest whole number.) |
| Number of runs | [removed] |
| c. |
Find the length (in days) of a run. (Round your answer to the nearest whole number.) |
| Run length (in days) | [removed] |
Problem 13-10
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A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 30 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $4 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? (Round your answer to the nearest whole number.) |
| Number of bags | [removed] |
| 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.) |
| Average inventory | [removed] bags |
| 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.) |
| Run length | [removed] days |
| 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.) |
| Run per year | [removed] |
| e. |
How much could the company save annually if the setup cost could be reduced to $27 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.) |
| Savings would be | $ [removed] |
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