Answer:
a. 21 327 hot dogs/run
b. 70 runs/yr
c. 4 da/run
Step-by-step explanation:
Data:
Production rate (p) = 5000/da
Usage rate (u) = 260/da
Setup cost (S) = $66
Annual carrying cost (H) = $0.45/hot dog
Production days (d) = 294 da
Calculations:
a. Optimal run size
(i) Annual demand (D) = pd = (5000 hot dogs/1 day) × (294 days/1 yr)
= 1 470 000 hot dogs/yr
(ii) Economic run size
= 21 327 hot dogs/run
b. Number of runs per year
Runs = D/Q₀ = (1 470 000 hot dogs/1yr) × (1 run/21 327 hotdogs)
= 70 runs/yr
c. Length of a run
Length = Q₀/p = (21 327 hot dogs/1 run) × (1 da/5000 hot dogs)
= 4 da/run
