# A chemical firm produces sodium n 100 pounds bags Demand for this p

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A chemical firm produces sodium n 100-pounds bags.
Demand for this product is 25 tons per day. The capacity
to produce the product is 75 tons per day. Setup costs
\$1500.00 and storage and handling costs are 55 per ton
per year. The firm operates 300 days a year.(note: one ton
is 2000 pounds) How many bags per run are optimal? What
would the average inventory for this. Determine the
approximate length of a production run in days. About how
many runs per year would there be?
Solution
p =75 tons/day = 75*2000/100 = 1500 bags/day
D = 25 tons/day= 25*2000/100 = 500bags/day = 500*300
=150,000 bags/year
u = 500bags/day
300 days per year
S = \$1500
H = 55 per ton = 55/(2000/100) per bag= 2.75 per
bag
a. optimal bags per run = sqrt(2*D*S/H)*sqrt(p/(p-
u) = sqrt(2*150,000*1500/2.75)*sqrt(1500/(1500-
500)=15667 bags

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A chemical firm produces sodium n 100 -pounds bags. Demand for this product is 25 tons per day. The capacity to produce the product is 75 tons per day. Setup costs \$1500.00 and storage and handling costs are 55 per ton per year. The firm operates 300 days a year.(note: one ton is 2000 pounds) How many bags per run are optimal? What would the average inventory for this. Determine the approximate length of a production run in days. About how many runs per year would there be? Solution p =75 tons/day = 75*2000/100 = 1500 bags/day D = 25 tons/day= 25*2000/100 = 500bags/day = 500*300 =150,000 bag ...
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