Question

Luxus Baking Company has developed a reputation for producing superb, one-of-a-kind wedding cakes in addition to its normal fare of breads and pastries. While the wedding cake business is a major moneymaker, it creates some problems for the bakery’s owner, Kari Therau, particularly in June. The company’s reputation for wedding cakes is largely based on the skills of Regina Yesterman, who decorates all of the cakes. Unfortunately, last year the company accepted too many cake orders for some June weekends, with the result that Regina was worked to a frazzle and almost quit. To prevent a recurrence, Kari has promised Regina that she will not have to work more than 31 hours in any week to prepare the wedding cakes for the upcoming weekend. (Regina also has other duties at the bakery, so even with the 31-hour limitation, she would be working more than full-time in June.)

A number of reservations for wedding cakes for the first weekend in June had already been received from customers by early May. When a customer makes a reservation, Ms. Therau gets enough information concerning the size of the wedding party and the desires of the customer to determine the cake’s price, the cost to make it, and the amount of time that Regina will need to spend decorating it. The reservations for the first weekend in June are listed below:

Customer	Incremental Profit			Regina’s Time Required (hours)
Afonso	$	116		4
Carloni		81		3
Cullins		245		7
Frese		66		3
Gerst		240		6
Jelovich		240		5
Klarr		329		7
Melby		84		2
Rideau		150		6
Towner		120		4
Total	$	1,671		47

For example, the Afonso cake would require 4 hours of Regina’s time and would generate a profit of $116 for the bakery. Following industry practice, pricing for the cakes is based on their size and standard formulas and does not reflect how much decorating would be required.

Required:

1. Ms. Therau feels that she must cancel enough cake reservations to reduce Regina’s workload to the promised level. She knows that customers whose reservations have been cancelled will be disappointed, but she intends to refer all of those customers to an excellent bakery across town. If the sole objective is to maximize the company’s total profit, which reservations should be cancelled? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	Frese
	Klarr
	Rideau
	Jelovich
	Carloni
	Gerst
	Cullins
	Towner
	Melby
	Afonso

2. What would be the total profit if your recommendation in part (1) above is followed?

Answer 1