Kellam Images prints snack food bags upon long rolls of plastic film. The plant operates 250 days 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?