Answer:
A) 22812 hotdogs per run
B) 75 runs/yr
C) 4 days in a run
Step-by-step explanation:
We are given;
Production rate;p = 5750 per day
Steady Usage rate;u = 270 per day
Setup cost of hotdog;S = $67
Annual carrying cost (H) = 47 cents = $0.47 per hot dog
No. of Production days; d = 297 days
A) Let's first find the annual demand given by the formula;
Annual demand;D = pd
D = 5750 × 297
D = 1707750 hot dogs/yr
Now, formula for optimal run size is given by;
Q_o = √[(2DS/H) × (p/(p - u))]
Plugging in the relevant values gives;
Q_o = √[(2 × 1707750 × 67/0.47) × (5750/(5650 - 270))]
Q_o =√520375454.7971209
Q_o = 22812 hotdogs per run
B) formula for Number of runs per year is given as;
No. of Runs = D/Q₀
Thus;
no. of runs = 1707750/22812
no. of runs ≈ 75 runs/yr
C) Length of a run is given by the formula;
Length = Q₀/p
Length = 22812/5750
Length ≈ 4 days in a run
