Question

Accountancy

Famous Albert prides himself on being the Cookie King of the West. Small, freshly baked cookies are the specialty of his shop. Famous Albert has asked for help to determine the number of cookies he should make each day. From an analysis of past demand, he estimates demand for cookies as


DEMANDPROBABILITY OF DEMAND
2,100dozen0.05
2,300
0.08
2,500
0.23
2,700
0.30
2,900
0.12
3,100
0.03
3,300
0.19




     Each dozen sells for $0.72 and costs $0.48, which includes handling and transportation. Cookies that are not sold at the end of the day are reduced to $0.32 and sold the following day as day-old merchandise.


a. Compute the expected profit or loss for each cookie making decision quantity. (Round your answer to the nearest whole number. Enter expected losses with a negative sign.)


Cookies Baked (Dozen)Probability of DemandExpected
Profit/Loss

2,1000.05$
2,3000.08

2,5000.23

2,7000.30

2,9000.12

3,1000.03

3,3000.19






b. Based on your answers to part a., what is the optimal number of cookies to make?


  Optimal number of cookies  dozen


c. By using marginal analysis, what is the optimal number of cookies to make?


  Optimal number of cookies  dozen  


0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 9 more requests to produce the answer.

1 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Accountancy
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • Seved Help Save & Exit Submit Famous Albert prides himself on being the Cookie King of...

    Seved Help Save & Exit Submit Famous Albert prides himself on being the Cookie King of the West. Small, freshly baked cookies are the specialty of his shop. Famous Albert has asked for help to determine the number of cookies he should make each day. From an analysis of past demand, he estimates demand for cookies as DEMAND 2,808 dezen 2,200 2,400 2,600 2,800 3, bee 3,200 PROBABILITY OF DEMAND 0.03 0.10 0.29 0.30 0.14 e.es 2.09 Each dozen sells...

  • DEMAND Probability Cumulative Probability 2100 0.05 2300 0.05 2500 0.20 2700 0.29 2900 0.14 3100 0.05...

    DEMAND Probability Cumulative Probability 2100 0.05 2300 0.05 2500 0.20 2700 0.29 2900 0.14 3100 0.05 3300 0.22 Each dozen sells for $0.70and costs 0.51 .cookies that are not sold at the end of the day are reduced to 0.27 and sold the following day as day-old merchandise. a)What is the optimal number of cookies to make? b)What is the corresponding expected profit? please tell me the formula to calculate the expected profit?? I want to know which formula is...

  • A realty company would like to develop a regression model to help set weekly rental rates for beach properties du...

    A realty company would like to develop a regression model to help set weekly rental rates for beach properties during the summer season. The independent variables for this model will be the size of the property in square feet, the number of bedrooms it has, the number of balthrooms it has, and its age. Use the accompanying data, which are from randomly selected rental properties, to complete parts a through d below EER Click the icon to view the data...

  • Martha's Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment....

    Martha's Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The company's controller, Mathew Knight, has recently completed a cost study of the firm's material handling department in which he used work measurement to quantify the department's activity. The control factor unit used in the work-measurement study was hundreds of pounds of equipment unloaded or loaded at the company's loading dock. Knight compiled the following data. Units of Activity (hundreds of pounds of equipment...

  • A 3-dimensional surface contains a saddle point when the point is a global minimum along a line parallel to eith...

    A 3-dimensional surface contains a saddle point when the point is a global minimum along a line parallel to either the x or the y axis, but a global maximum along the other axis. You'll usually see a "U" shape meeting an upside-down "U" shape. The classic horseback riding saddle has one such saddle point, and, not coincidentally, it is a rider's most stable position The input will be a 2-dimensional array AInIn] of numbers, representing a lattice approximation of...

  • Use Table 8.1, a computer, or a calculator to answer the following. Suppose a candidate for...

    Use Table 8.1, a computer, or a calculator to answer the following. Suppose a candidate for public office is favored by only 47% of the voters. If a sample survey randomly selects 2,500 voters, the percentage in the sample who favor the candidate can be thought of as a measurement from a normal curve with a mean of 47% and a standard deviation of 1%. Based on this information, how often (as a %) would such a survey show that...

  • Please answer question 2 and 3. Q2 (33 points) A manufacturer produces and sells bottled drinks....

    Please answer question 2 and 3. Q2 (33 points) A manufacturer produces and sells bottled drinks. Their production capacity is 570 units daily, but their sales at the moment are estimated at 400 units per day. The manufacturer produces Mondays through Fridays. The variable cost for production is $1.5. The manufacturer incurs about $250 labor cost per production order for setups. Accounting estimates annual holding costs as $0.30 per unit. a) Determine the optimal production quantity for the bottled drinks....

  • Jackie is a lady entrepreneur from Chicago, Illinois. She owns and runs a pebbles manufacturing company...

    Jackie is a lady entrepreneur from Chicago, Illinois. She owns and runs a pebbles manufacturing company called ‘JK Pebbles Inc.’. She has customers both within and outside of the United States of America. She buys naturally available rocks (in different colours) like granite, marble and quartz from the local quarries. The raw material is put through processes of crushing, tumbling and polishing before being packed and dispatched to the customer. Jackie’s factory is in operation for 250 days a year....

  • On Monday, February 10, Mr. Mitchell Gordon, Vice President of Operations, asked the Controller, the Sales...

    On Monday, February 10, Mr. Mitchell Gordon, Vice President of Operations, asked the Controller, the Sales Manager, and the Production Manager to meet with him to discuss the number of tomato products to pack that season. The tomato crop, which had been purchased at planting, was beginning to arrive at the cannery, and packing operations would have to be started by the following Monday. Red Brand Canners was a medium-sized company that canned and distributed a variety of fruit and...

  • FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the...

    FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the blank Scarcity is the intimited nature of society's resources given society's limited wants 2. A reward is a type of positive incentive. 3. To remove difficulty of double coincidence of wants we use money. 4. An exogenous factor is a variable that can be controlled for inside the model. 5. The PPF will not have a constant slope. 6. The law of demand states...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT