Question: Pete's Paper Processing processes paper to sell to office supply stores. They sell several lines of product depending on the needs of the customer and
Pete's Paper Processing processes paper to sell to office supply stores. They sell several lines of product depending on the needs of the customer and they batch the production. The daily demand the \\( \\times 225 \\) line of Pete's Paper is 15 pallets. They estimate that each batch run cost \\( \\$ 30 \\) in setup and that they require approximately 3750 pallets a year. They estimate that it cost \\( \\$ 2 \\) per pallet to hold paper in inventory for 1 year. Their daily production rate is 35 pallets. How large should each production run be (how big is a batch to the nearest whole number)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
