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Donut House Headquarters is trying to plan out a new facility for their Donut House location. They are trying to figure out how much space
Donut House Headquarters is trying to plan out a new facility for their Donut House location. They are trying to figure out how much space needs to be allocated to glazed donuts in their new location. They have determined they should sell 7,200 glazed donuts a day (they are open 300 days a year). The cost of owning a donut is $1.75 a year. It costs $7 to changeover all the equipment to start glazing donuts. Donut House has bought the rights to a new piece of donut making machinery that can produce 9,000 donuts per day. What is the number of donuts that Donut House should make at a time as to minimize their total inventory costs? What is the maximum number of donuts that Donut House should have on their shelves at any given time? What is the average amount of donuts that Donut House would have at any given time? How many production runs of glazed donuts will Donut House have in a year? What is the annual setup cost for Donut House? What is the annual holding cost for Donut House?
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