Concept explainers
The Ambrosia Bakery makes calms 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) 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 $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 calms. Determine the following:
- a. Optimal production run quantity (Q)
- b. Total annual inventory costs
- c. Optimal number of production runs per year
- d. Optimal cycle time (time between run starts)
- e. Run length in working days
Want to see the full answer?
Check out a sample textbook solutionChapter 13 Solutions
Operations and Supply Chain Management, 9th Edition WileyPLUS Registration Card + Loose-leaf Print Companion
Additional Business Textbook Solutions
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Business in Action
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Business in Action (8th Edition)
Operations Management, Binder Ready Version: An Integrated Approach
- 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 perday. 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 facilitiesfor 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 frozenfruit pies, which is constant over time, is 5,000 pies. Determine The run length, in working daysarrow_forwardThe 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 perday. 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 facilitiesfor 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 frozenfruit pies, which is constant over time, is 5,000 pies. Determine The optimal number of production runs per yeararrow_forwardThe 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 perday. 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 facilitiesfor 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 frozenfruit pies, which is constant over time, is 5,000 pies. Determine The total annual inventory costsarrow_forward
- 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 perday. 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 facilitiesfor 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 frozenfruit pies, which is constant over time, is 5,000 pies. Determine The optimal cycle time (time between run starts)arrow_forwardThe TransCanada Lumber Company and Mill processes 10,000 logs annually, operating 250 days per year. Imme-diately upon receiving an order, the logging company’s supplier begins delivery to the lumber mill at the rate of 60 logs per day. The lumber mill has determined that the or-dering cost is $1600 per order, and the cost of carrying logs in inventory before they are processed is $15 per log on anannual basis. Determine the following:a. The optimal order sizeb. The total inventory cost associated with the optimalorder quantityc. The number of operating days between ordersd. The number of operating days required to receive anorderarrow_forwardThe amount of denim used daily by the Southwest ApparelCompany in its manufacturing process to make jeans isnormally distributed with an average of 4000 yards ofdenim and a standard deviation of 600 yards. The lead timerequired to receive an order of denim from the textile mill is a constant 7 days. Determine the safety stock and re-order point if the company wants to limit the probability of a stockout and work stoppage to 5%.arrow_forward
- 13.20. Southwood Furniture Company is a U.S.-based furniture manufacturer that offshored all of its actual manufacturing opera- tions to China about a decade ago. It set up a distribution center in Hong Kong from which the company ships its items to the United States on container ships. The company learned early on that it could not rely on local Chinese freight forwarders to arrange for sufficient containers for the company's shipments, so it contracted to purchase containers from a Taiwanese manufacturer and then sell them to shipping companies at the U.S. ports the containers are shipped to. Southwood needs 715 containers each year. It costs $1200 to hold a container at its distribution center, and it costs $6000 to receive an order for the containers. Determine the optimal order size, min- imum total annual inventory cost, number of annual orders, and time between orders.arrow_forwardCatlea Merchandising is engaged in selling school shoesfor both boys and girls in their teenage years. Catlea needs 32,000 pairs of shoes in a year in order to satisfy the market demand. It costs ₱ 48 to place an order while ₱ 8 is needed to hold each quantity of shoe in Catlea's inventory. Upon checking on Catlea's supplier, it takes 8 days in between placing an order and eventually receiving it. a. Determine the Economic Order Quantityb. Determine the number of order per monthc. Determine the reorder pointarrow_forwardThe 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 cakesper day. The bakery sets up the cake-production operationand produces until a predetermined number (Q) have beenproduced. When not producing cakes, the bakery uses itspersonnel and facilities for producing other bakery items.The setup cost for a production run of cakes is $700. Thecost of holding frozen cakes in storage is $9 per cake peryear. 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 daysarrow_forward
- 33) please please help me with this Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from history that an average of 28 customers (with a standard deviation of 14) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $122. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $228. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost. By how many seats should Super Discount overbook the flight? Note: Use Excel's NORM.S.INV function to find the z value. Round z value to 2 decimal places. Round your answer to the nearest whole number.arrow_forwardThe local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $9.00 a box. The lettuce is sold for $17.00 a box and the dealer that sells old lettuce is willing to pay $5.00 a box. Past history says that tomorrow's demand for lettuce averages 258 boxes with a standard deviation of 41 boxes. How many boxes of lettuce should the supermarket purchase tomorrow? (Round your answer to the nearest whole number.) Number of boxes ???arrow_forwardGameStop has maintained 75% service level for inventory of PlayStation 5. Mean demand during lead time is 166 PlayStations, and the standard deviation during lead time is 58 PlayStations. The annual cost of carrying one PlayStation in inventory is $12. The store’s operations analyst recently told GameStop's management that they could expect a $550 improvement in profit (based on current figures of cost per PlayStation) if the service level were increased to 97.5%. Is it worthwhile for GameStop to make this change?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.