Problem 13-6

A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month.

How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

Problem 13-9

The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 280 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 297 days a year.

a.

Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Optimal run size b.

Find the number of runs per year. (Round your answer to the nearest whole number.)

Number of runs c.

Find the length (in days) of a run. (Round your answer to the nearest whole number.)

Run length (in days)

Problem 13-10

A chemical firm produces sodium bisulfate in 100-pound bags. Demand for this product is 30 tons per day. The capacity for producing the product is 50 tons per day. Setup costs $100, and storage and handling costs are $4 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 answer to the nearest whole number.)

Number of bags 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.)

Average inventory bags 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.)

Run length days 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.)

Run per year e.

How much could the company save annually if the setup cost could be reduced to $27 per run? (Round your intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

Savings would be$

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