A large bakery makes cakes for freezing and subsequent sale. The bakery can produce cakes at the rate of 169 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 $100. 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 54600 cakes. Assume 364 days a year and 52 weeks a year.
What is the "daily" demand rate?
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How many frozen cakes to produce in a production cycle? (keep two decimal places)
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How many cakes are in the freezers when the bakery stops the production in a given production cycle? (keep two decimal places)
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How long is the production cycle?
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How long in each production cycle the bakery produces cakes to freeze?
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How long in each production cycle the bakery is not producing cakes and can use its personnel and facilities for producing "other" bakery items?
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How much is the total annual inventory related costs?