Kellam Images Prints Snack Food Bags on Long Rolls of Plastic

question 31

Essay

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?

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Definitions:

Scatter Diagram

A graphical representation that shows the relationship between two variables, plotted as points on a Cartesian coordinate system.

Linear Model

A statistical model that assumes a linear relationship between input variables (independent) and a single output variable (dependent).

Oil Quality

Oil quality refers to the chemical and physical properties of oil that dictate its suitability for various uses or processes.

Least Squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of squares of the vertical distances of the points from the line.