The production process at Father Dominic’s Pizza can produce 400 pizza pies per day; the ?rm operates 250 days per year. Father Dominic’s has a cost of $180 per production runand a holding cost of $5 per pizza-year. The pies are frozen immediately after they are produced and stored in a refrigerated warehouse with a current maximum capacity of 2,000 pies.
a) Annual demand is 37,500 pies per year. What production run size should be used?
b) What is the total annual cost incurred in meeting demand?
c) How many days per year will the company be producing pizza pies?
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