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Ch13 Exercise+9

The document summarizes an inventory management problem for a bakery that produces frozen cakes. It provides information on the bakery's daily production capacity, setup costs, storage costs, and annual demand. It then lists the optimal production run quantity as 1079 cakes, total annual inventory costs as $7782, optimal number of production runs as 5.55 runs per year, optimal cycle time as 46.78 working days, and run length as 9.30 working days.

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Ashley Wilkey
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1K views

Ch13 Exercise+9

The document summarizes an inventory management problem for a bakery that produces frozen cakes. It provides information on the bakery's daily production capacity, setup costs, storage costs, and annual demand. It then lists the optimal production run quantity as 1079 cakes, total annual inventory costs as $7782, optimal number of production runs as 5.55 runs per year, optimal cycle time as 46.78 working days, and run length as 9.30 working days.

Uploaded by

Ashley Wilkey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Exercise 9 Chapter 13 (Part 2) Inventory Management

Instruction: The following is a Production Quantity Model. Please refer to page 567 569 to find the right equations. 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 116 cakes per day. The bakery sets up the cake-production operation and produces until a predetermined number (Q) have 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 $700. The cost of holding frozen cakes in storage is $9 per cake per year. The annual demand for frozen cakes, which is constant over time, is 6000 cakes. Determine the following: a. Optimal production run quantity (Q) 1079.36 cakes b. Total annual inventory costs $7782/year

c. Optimal number of production runs per year 5.55 runs/year

d. Optimal cycle time (time between run starts) 46.78 working days

e. Run length in working days 9.30 runs/working day

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