A study on energy and manpower requirements for the bakery industry in Nigeria was carried out, covering 90 bakeries representing 75% of total registered bakeries in Onitsha city. Analysis of the energy and manpower related time series data, using engineering and statistical tools, resulted in the development of empirical model for the estimation of capacity, manpower and energy requirements in the bakery industry. This empirical model can be used for the design of a new bakery or expansion of existing one. The conditions for optimum inventory and design were determined through this optimization and the results were compared with existing system. The study revealed a huge capital investment which amounts to 5.6 billion Naira annually, a correlation between capacity of the bakery plants and resource usage (manpower, raw materials and energy use), and jobs creation potentials for 960 persons for Onitsha city alone. Diesel contributes 66.75% of total heating energy need, followed by firewood, 22.57% and petrol, 10.68%. Application of optimization techniques could result in 61% savings in inventory costs and cut in energy by about 7.4% with overall cost reduction of 8%. (C) 2010 Elsevier Ltd. All rights reserved.