Question
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
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 cakes per day. The bakery sets us the cake production operation and produces until a predeterined number (Q) has been produced. When not producing akes, the bakery uses the its personnel and faciliies for producing other bakery itemsm. The setup cost for a production run of cakes is $700. The cost for holding fozen cakes in storage is $9 per cake per year. The annual demand for fozen cakes which is constant over time is 6,000 cakes. (This question has five parts, a - e)
Question a:
What is the Optimal production run quantity, (Q)?
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