Question

A large bakery makes cakes for freezing and subsequent sale. The bakery can produce cakes at the rate of 484 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

Answer 1

150

Step-by-step explanation:

The computation of the daily demand rate is shown below:

Daily demand rate = Annual demand for frozen cakes ÷ total number of days in a year

= 54,600 cakes ÷ 364 days

= 150

By dividing the annual demand from the total number of days in a year we can get the daily demand rate and the same is shown above