6 the simple simon bakery produces fruit pies for freezing and subsequ
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Question
6. The Simple Simon Bakery produces fruit pies for
freezing and subsequent sale. The bakery, which
operates 5 days per week, 52 weeks per year, can
produce pies at the rate of 64 pies per day. The
bakery sets up the pie production operation and
produces until a predetermined number (Q) of pies
has been produced. When not producing pies, the
bakery uses its personnel and facilities for producing
other bakery items. The setup cost for a production
run of fruit pies is $500. The cost of holding frozen
pies in storage is $5 per pie per year. The annual
demand for frozen fruit pies, which is constant over
time, is 5,000 pies. Determine the following:
a. The optimal production run quantity (Q)
b. The total annual inventory costs
c. The optimal number of production runs per
year
d. The optimal cycle time (time between run
starts)
e. The run length, in working days