The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per d

Question

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 260 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 292 days a year.

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

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

Explanation / Answer

p=5000 per day; u=260 per day; S=$66; H=$0.45 per hot dog; Tyear=292 days

Q=Square root of 2DS/H XSquare root of p/p-u

square root of 2x260x292x66/0.45 xsquare root of 5000/5000-260

4719x1.02=4813

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