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operations management

Problem 13-6

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.

 

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

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

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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