**Problem 1**

The Simple Simon Bakery produces fruit pies for freezing and subsequent sale. The bakery, which operates 5 days per week, 52 weeks per year, can produce pies at the rate of 64 pies per day. The bakery sets up the pie production operation and produces until a predetermined number (Q) of pies has been produced. When not producing pies, the bakery uses its personnel and facilities for producing other bakery items. The setup cost for a production run of fruit pies is $500. The cost of holding frozen pies in storage is $5 per pie per year. The annual demand for frozen fruit pies, which is constant over time, is 5,000 pies. Determine the following:

- The optimal production run quantity (Q)
- The total annual inventory costs
- The optimal number of production runs per year
- The optimal cycle time (time between run starts)
- The run length, in working days

**Problem 2**

In Problem 1 in Chapter 15**(see below),** the Saki motorcycle dealer in Minneapolis–St. Paul orders the Saki Super TXII motorcycle it sells from the manufacturer in Japan. Using the 3-month moving average forecast of demand for January as the monthly forecast for the next year, an annual carrying cost of $375, an ordering cost of $3,200, and a lead time for receiving an order of 1 month, deter- mine the optimal order size, the minimum total annual inventory cost, the optimal time between orders, the number of orders, and the reorder point.

JANUARY | 9 |

FEB | 7 |

MAR | 10 |

APRIL | 8 |

MAY | 7 |

JUNE | 12 |

JULY | 10 |

AUGUST | 11 |

SEPT | 12 |

OCT | 10 |

NOV | 14 |

DEC | 16 |

**Problem 3**

The Pacific Lumber Company and Mill processes 10,000 logs annually, operating 250 days per year. Immediately upon receiving an order, the logging company’s supplier begins delivery to the lumber mill, at a rate of 60 logs per day. The lumber mill has determined that the ordering cost is $1,600 per order and the cost of carrying logs in inventory before they are processed is $15 per log on an annual basis. Determine the following:

- The optimal order size
- The total inventory cost associated with the optimal order quantity
- The number of operating days between orders
- The number of operating days required to receive an order

Last Updated on February 11, 2019 by Essay Pro