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Math Homework

1. The optimal production lot size for a snack food packaging plant operating 300 days per year with a daily production rate of 5500 bags and daily demand of 3000 bags is 1050000 bags. This would result in 190 set-ups per year with a set-up cost of $350 and holding cost of $0.05 per bag. 2. For an inventory model with backorders where the annual demand is 350 tables, holding cost is 20% and ordering cost is $75, the optimal ordering quantity is 27 units, maximum backorder quantity is 15 units, and total annual cost is $229.

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752 views

Math Homework

1. The optimal production lot size for a snack food packaging plant operating 300 days per year with a daily production rate of 5500 bags and daily demand of 3000 bags is 1050000 bags. This would result in 190 set-ups per year with a set-up cost of $350 and holding cost of $0.05 per bag. 2. For an inventory model with backorders where the annual demand is 350 tables, holding cost is 20% and ordering cost is $75, the optimal ordering quantity is 27 units, maximum backorder quantity is 15 units, and total annual cost is $229.

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Ch. 10 Homework SHOW WORK on all 3 problems.

1. Kellam Images prints snack food bags on long rolls of plastic film. The plant operates
300 days a year. The daily production rate is 5500 bags (max), and the daily demand is 3000
bags. The cost to set up the design for printing is $350. The holding cost is estimated at $0.05
per bag.
What is the recommended production lot size?
D = 3000/day * 350
= 1050000

How many set-ups are there per year?


Set-ups = Q/p
= 1050000/5500
Total number of set-ups per year = 190.90

2. Use these assumptions of an inventory model with backorders.

D = 350 tables per year


Ch = 20% per year
C = $750 per table
Co = $75 per order
Cb = $55 per table per year
The store is open 250 days a year.

Calculate the optimal ordering quantity, max backorder quantity, and total annual cost.

Optimal ordering quantity = Q* = √2DC0/Ch


= √2 * D * C0/Ch
= √2 * 350 * 75/70
= √52500/70
= √750
= 27 units
Max backorder quantity = S* = Q* *(Ch/(Ch+Cb))
= 27 * (70/(70+55))
= 15 units

Total annual cost = [Ch*(Q*-S*)2/2Q*] + Q* + S*


= [70 * (27-15)2/2*27] + 27 + 15
= [10080/54] + 27 + 15
= 187 + 27 + 15
Total annual cost = $229

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