Louisiana Specialty Foods Can Produce Their Famous Meat Pies at a Rate

question 145

Essay

Louisiana Specialty Foods can produce their famous meat pies at a rate of 1650 cases of 48 pies each per day. The firm distributes the pies to regional stores and restaurants at a steady rate of 250 cases per day. The cost of setup, cleanup, idle time in transition from other products to pies, etc., is $320. Annual holding costs are $11.50 per case. Assume 250 days per year.
a. Determine the optimum production run.
b. Determine the number of production runs per year.
c. Determine maximum inventory.
d. Determine total inventory-related (setup and carrying) costs per year.

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Definitions:

Market Price

Is the current price at which an asset or service can be bought or sold in a marketplace.

Price Rises

An increase in the monetary cost of goods or services over time, typically measured by inflation rates.

Wheat Yields

The quantity of wheat produced per unit of land area, an important metric for evaluating agricultural productivity and economic viability for farmers.

Total Revenues

The full amount of income generated by the sale of goods or services before any expenses are subtracted.