Kellam Images prints snack bags on long rolls of plastic film. The plant operates 250 days a year. The daily production rate is 6,000 bags, and the daily demand is 3,500 bags sold for $2 each. The cost to set up the design for printing is $300. The maintenance cost is estimated at 1% of the price of a bag per day. Show your work.

A) What is the optimal production lot size (economic production quantity, EPQ)?

B) What is the optimal number of production runs per year (optimum production frequency)?

C) What is the optimal time between settings (optimal cycle time) in days?

D) Find the optimal (minimum) total cost.

e) Find the optimal maximum inventory.

F) Find the optimal average inventory.

Answer rating: 100% (QA)

To find the optimal production lot size EPQ and related parameters we can use the Economic Order Qua... View the full answer