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A company extracts oil from canola seeds. Demand for canola oil is constant throughout the year at the rate of 72,000 cans. The holding cost is $0.50 per can per year. The cost involved in the machine set-up is $100 per set-up. The production capacity of the machine is 300 cans per day. The year has 365 days. Determine the following:  a. The optimal production run quantity b.The maximum inventory C.The total minimum annual inventory costs D.The optimal number of production runs per year E.The length of the production run

A company extracts oil from canola seeds. Demand for canola oil is constant throughout the year at the rate of 72,000 cans. The holding cost is $0.50 per can per year. The cost involved in the machine set-up is $100 per set-up. The production capacity of the machine is 300 cans per day. The year has 365 days. Determine the following:  a. The optimal production run quantity b.The maximum inventory C.The total minimum annual inventory costs D.The optimal number of production runs per year E.The length of the production run

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A company extracts oil from canola seeds. Demand for canola oil is constant throughout the year at the rate of 72,000 cans. The holding cost is $0.50 per can per year. The cost involved in the machine set-up is $100 per set-up. The production capacity of the machine is 300 cans per day.
The year has 365 days.

Determine the following: 

a. The optimal production run quantity
b.The maximum inventory
C.The total minimum annual inventory costs
D.The optimal number of production runs per year
E.The length of the production run

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