Makes cakes for freezing and subsequent sale

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Reference no: EM131781046

The Ambrosia Bakery makes cakes for freezing and subsequent sale. The bakery, which operates five days a week, 52 weeks a year, can produce cakes at the rate of 124 cakes per day. The bakery sets up the cake production operation and produces until a predetermined number (Q) has been produced. When not producing cakes, the bakery uses its personnel and facilities for producing other bakery items. The setup cost for a production run of cakes is $750. The cost of holding frozen cakes in storage is $8 per cake per year. The annual demand for frozen cakes, which is constant over time, is 6,600 cakes.

Determine the following:

a. Optimal production run quantity (Q), (round your answer to the nearest whole number, the tolerance is +/- 1.)

b. Total annual inventory costs $, (round your answer to 2 decimal places, the tolerance is +/- 1.)

c. Optimal number of production runs per year runs, (round your answer to 2 decimal places, the tolerance is +/- 0.1.)

d. Optimal cycle time (time between run starts) days, (round your answer to 2 decimal places, the tolerance is +/- 0.1.)

e. Run length in working day

Reference no: EM131781046

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