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The owners of Good Taste, a bakery in Lewisburg, PA are attempting to determine how many loaves of their famous raisin bread to bake for the first day of the upcoming county fair. Company accounting records show that each loaf of raisin bread costs $1.30 to make. Good Taste plans to sell each loaf for $2.75. Unsold loaves can be sold on the county fair's second day as "day-old" products. The owners plan to sell such loaves for $0.90 each. Furthermore, they feel that county fair patrons are likely to buy 1,250 loaves on the first day. Their goal is to decide how many loaves to bake in order to maximize expected profit from these sales. a) Please set up a spreadsheet for the inputs for each input. b) How many loaves do you recommend Good Taste to bake? Do a sensitivity analysis to answer (i.e. how does profit change with respect to the number of loaves baked. Use order quantity from 100,200,…,2500). (Tip. Use data table in what if analysis) c) Suppose the owners of Good Taste decide to make 1400 loaves (this is not necessarily the correct answer to part b). How many loaves must they sell to break-even; i.e. what is the demand at which Good Taste breaks-even? d) The demand for raisin bread is uncertain. So, the owners of Good Taste want to know the maximum profit they can make if demand is 900, 1000, 1100, 1200 or 1300. Build a two-way data table calculating the profit for different demand and baking quantity values (given in the template). Report the maximum profit for each demand value.
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