3 The production process at Father Dominic’s Pizza can produce 400 pizza pies per day; the firm operates 250 days per year. Father Dominic’s has a cost of $180 per production run and a holding cost of $5 per pizza-year. The pies are frozen immediately after they are produced and stored in a refrigerated warehouse with a current maximum capacity of 2,000 pies.

a Annual demand is 37,500 pies per year. What production run size should be used?

b What is the total annual cost incurred in meeting demand?

c How many days per year will the company be producing pizza pies?