13.6. The Ambrosia Bakery makes cakes for freezing and subsequentsale. The bakery, which operates five days a week, 52 weeks a year, canproduce cakes at the rate of 116 cakes per day. The bakery sets up thecake-production operation and produces until a predetermined number(Q) has been produced. When not producing cakes, the bakery uses itspersonnel and facilities for producing other bakery items. The setup costfor a production run of cakes is $700. The cost of holding frozen cakesin 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)b. Total annual inventory costsc. Optimal number of production runs per yeard. Optimal cycle time (time between run starts)e. Run length in working days

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Optimal production run quantity (Q) b. Total annual inventory costs a. c. Optimal number of production runs per year