A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 20 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $5 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 intermediate calculations to 2 decimal places and final answer to the nearest whole number.)
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.)
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.)
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.)
e.
How much could the company save annually if the setup cost could be reduced to $25 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)