The friendly sausage factory can produce

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Video Transcript

Hello everyone. So the question says that the friendly sausage factory can produce hot dogs at a rate of 5000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 250 per day. The cost to prepare the equipment for producing hot dog is $66. Now annual holding cost of $0.45 per hot dog. So the factory operates 2 92 days a year. Now considering the information given will calculate the annual demand. So annual demand that will be denoted by D. Is equals to deem small. Didn't multiplied by 2 92. That is this denotes daily demand. So Multiplied by 2 92 days and daily demand is given 2 50 units. So to 50 divided by two, multiplied by 2 92. That gives 70 3000 hot dogs. Now will calculate the economic production quantity that is epic. So epic U. Is equals to under root two Ds Divided by H. 1- D. Divided by P. So it will be two multiplied by 73,000, multiplied by $66 divided by 0.45 one minus 2 50 divided by 5000. So now on solving this we'll get E. P. Q. Is equals to 4747.67. Or Rounding off will get 4700 48 hot dogs. Thus the optimal run size is For 4748 hot dogs. Now will calculate the number of production runs per year. So it will be end P. E. Is equals to and will demand divided by that is equals to 73,000, divided by 4748. That is equals to 15 38. Our on rounding off, you'll get 16 runs. Does the number of runs per year is 16. Now will calculate the cycle time or length in days. So it will be cycle time as equals two E p Q divided by D, Which is equals to 4740 divided by 250. That is equals to 18.99 on rounding of it will be 19 days. I hope you understood. Thank you.