Use this information to answer the following questions.
A cake factory can produce cakes at the rate of 500 per day.The factory supplies its cakes to local grocery stores at a rate of 250 per day.The cost to prepare the equipment for producing the cakes is $20.Annual holding costs are $2 per cake.Assume that the factory operates 250 days a year.
-Refer to the information above.What is the length of a production cycle in days?
A)3.2
B)4.1
C)2.7
D)5.3
E)4.9

Question

Quizplus · Accepted Answer

The production cycle length can be calculated using the formula: Production cycle length = (Production rate per day / Demand rate per day). Here, it is 500 cakes/day divided by 250 cakes/day, which equals 2 days. However, since the options provided do not include 2, the closest option is 3.2 days.

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