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 230 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 293 days a year.

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

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

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

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 230 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 293 days a year.

Explanation / Answer

p = 5000 per day

u = 230 per day

s = 66

H =0.45 per hot dog

T = 293 days

Demand D = 230 * 293

a)

optimal run size Q = sqrt(2DS/H) sqrt(p/p-u)

= sqrt(2* 230*293 * 66/0.45) sqrt(5000/5000-230)

= 4552 hot dogs

b)

cycle time = Q/u = 4552/230 = 19.79 = 20 days

number of runs = 293/20 = 14.65 = 15

c)

run time = Q/p

= 4552/5000

= 0.9104

= 1

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