Kellam Images prints snack food bags on long rolls of plastic film. The plant operates 250 days a year. The daily production rate is 6000 bags, and the daily demand is 3500 bags. The cost to set up the design for printing is $315. The holding cost is estimated at 2 cents per bag per year.
a. What is the recommended production lot size?
b. If there is a five-day lead time to set up the line, what is the recommended reorder point?
c. How long is each production run?
d. What is the TC for the recommended production plan?
e. Sketch the inventory level over time, including the highest inventory level, production run time, and cycle time.