The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 4.250 per d

Question

The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 4.250 per day FSF supplies hot dogs to local restaurants at a steady rate of 300 per day. The cost to prepare the equipment for producing hot dogs is $70. Annual holding costs are 50 cents per hot dog. The factory operates 300 days a year rof 300 pfactory operalies ize. (Do not round intermediate calculations. Round your answer to the nearest whole number) Optimal run size b. Find the number of runs per yea: (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) K Prev 2of Next> MacBook 3 5 6 0

Explanation / Answer

Annual Production rate, P = 4250 * 300 = 1275000

Annual Demand, D = 300 * 300 = 90000

Set-up cost = 70

Annual Holding cost = 0.5 per hot dog

a) Therefore, Optimal run size = ?(2 * AnnualDemand * Set-up cost / Holding cost *( annual production - annual demand)/annual production)

=?(2* 9*104 *70/ 0.5* (127.5*104 -9*104)/127.5*104) = 4840 units

b) number of runs per year = total production/ batch size = 1275000/4840 = 27 runs

c) Length of a run

4250 = one day, therefore, for 4840 units, run-time = 4840/4250 = 2 days

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