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A Las Vegas supermarket bakery must decide how many wedding cakes to prepare for the upcoming weekend. Cakes cost $33 each to make, and they sell for $60 each. Unsold cakes are reduced to half-price on Monday, and typically one-third of those are sold. Any that remain are denoted to a nearby senior center. How many cakes should be prepared to maximize expected profit

Respuesta :

letmeanswer

The bakery should stock 2 wedding cakes.

Solution:

Cost = $33/cake

Rev = $60

Shelter value= $30

Cost of stock out = Selling Price - Unit cost

                                   = $60 - $33 = $27

Cost of excess inventory = Unit cost - Salvage value

                                                = $33 - $30 = $23

The bakery will stock 2 marriage bakes as the service standard of 0.54 dropped to a combined likelihood of 0.50 and 0.80.

Maximize expected profit is: The bakery should stock 2 wedding cakes.

Calculation Salvage value

The Cost is = $33/cake

Then Rev is = $60

Shelter value is = $30

The Cost of stock out is = Selling Price - Unit cost

                            After that = $60 - $33 = $27

The formula is Cost of excess inventory = Unit cost - Salvage value

                                               = $33 - $30 = $23

Therefore, When The bakery will stock 2 marriage bakes as the service standard of 0.54 dropped to a combined likelihood of 0.50 and also 0.80.

Find more information about Salvage value here:

https://brainly.com/question/13964990

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