High School

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A large bakery produces cakes for freezing and subsequent sale. The bakery can produce cakes at a rate of 208 cakes per day. 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 54,600 cakes. Assume 364 days in a year and 52 weeks in a year.

What is the daily demand rate?

Answer :

The Daily Demand Rate is Daily Demand Rate = 150 cakes per day.

To calculate the "daily" demand rate for cakes, we need to divide the annual demand by the number of days in the year. The bakery has an annual demand of 54600 cakes.

Given that there are 364 days in a year, the daily demand rate can be calculated as follows:

  • Daily Demand Rate = Annual Demand ÷ Number of Days in a Year
  • Daily Demand Rate = 54600 cakes ÷ 364 days
  • Daily Demand Rate = 150 cakes per day

This figure represents the average number of cakes that the bakery must supply each day to meet the annual demand.

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