Problem 13-9 The Friendly Sausage Factory (FSF) can produce hot dogs at a rate o
ID: 458976 • Letter: P
Question
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 240 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 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.
a.Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Explanation / Answer
Hot dogs produced per day (p) = 5,000 hotdogs/day
Hot dogs supplied per day(u) = 250 hotdogs/day & factory works 300 days per year
So, Hot dogs supplied per year D= 250/day x 300 days/yr. = 75,000 hotdogs/yr.
Cost of preparing equipmentS = $66
H = $.45/hotdog per yr.
a. Optimal size(Q) = (2D*S/H)^1/2 * (p/(p-u))^1/2 = 4812.27(round to 4812)
b. D/Q = 75,000/4,812 = 15.59,( 16 runs/yr approx).
c. run length = Q/p = 4,812/5,000 = .96 days, (approximately 1 day)