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Production Lot Size and Waiting Lines

1. 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 $300. The holding cost is estimated at 2 cents per bag.

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?


2. In a waiting line situation, arrivals occur at a rate of 2 per minute, and the service times average 18 seconds.

Assume the Poisson and exponential distributions.
a. What is Arrival rate?
b. What is Service rate?
c. Find probability of no units in the system.
d. Find average number of units in the system.
e. Find average time in the waiting line.
f. Find average time in the system.
g. Find probability that there is one person waiting

Solution Summary

The posting contains one problem on Economic production lot size and one problem on waiting line.