Question

The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,250 per day. FSF supplies hot dogs to local restaurants at a steady rate of 380 per day. The cost to prepare the equipment for producing hot dogs is $67. Annual holding costs are 49 cents per hot dog. The factory operates 289 days a year.

Please show work :) thank you.

1.Find the optimal run size.

2.Find the number of runs per year.

3.Find the length (in days) of a run.

Answer 1

Number of hot dogs that FSF can produce per day (b) = 5250

Number of hot dogs that FSF supplies to local restaurants per day (c) = 380

Cost to prepare equipment (S) = $67

Annual holding cost (H) = $0.49 per day

The number of days that the factory operates per year (T) = 289

Ans 1) Optimal run size (Q) =     

=

=

= 5480.1832 * 1.0382

= 5689.526 hot dogs

= 5690 hot dogs (approx)

Ans 2)

Cycle time = Q / c

= 5690 / 380

=14.97 = 15 days (approx)

Number of runs per year = T / Cycle time

= 289 / 15

= 19 (approx)

Ans 3)

Length of a run = Q / b

= 5690 / 5250

= 1.0838