Determine the optimal number of donuts

Assignment Help Operation Management

Reference no: EM13962100

The university has given Vecino’s Bakery the concession to sell glazed donuts in the Graduate School of Business Administration during evening classes. It costs the bakery $.15 to produce each donut, and Vecino’s sells the donuts to students for $0.35 each. Any donuts that are unsold at the end of the evening are donated to a local charity, and the bakery obtains a tax credit equal to $.05 per donut. If Vecino’s produces too few donuts and does not have enough to satisfy all its customers, it incurs a customer goodwill cost of $.25 per donut demanded. The bakery hires a student to operate the concession and pays the student $15 per evening. After several months of operations, the bakery has determined that demand for glazed donuts on weekday evenings approximately follows a normal distribution with a mean of 120 and a standard deviation of 20. Vecino’s wishes to determine the optimal number of donuts to prepare for weekday evenings.

Reference no: EM13962100

Questions Cloud

What is the journal entry : On July 2, 2016, Filington paid $620,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,050,000 for the year. Spandella uses the equity method in accounting for its investment in Filington. What..

Present value of an investment : What is the present value of an investment that offers one payment of $13,488.60 at the end of year 3 if money can be invested at 9 percent?

Compensation law to which turner construction appealed fair : In your judgment, and from an ethical point of view, should Turner Construction and/or B& C Steel pay for all or part of the $2,428,000? If they should pay only part, indicate which part. In your judgment, and from an ethical point of view, should El..

Fair wages depend on the industry and the local area : Fair wages depend on the industry and the local area. If wages in the United States are fair, why are there so many people living in poverty? What can be done to correct this?

Determine the optimal number of donuts : The university has given Vecino’s Bakery the concession to sell glazed donuts in the Graduate School of Business Administration during evening classes. It costs the bakery $.15 to produce each donut, and Vecino’s sells the donuts to students for $0.3..

Excess of issue price over par-common stock : Dividends payable $30.00 13 Common stock, $10 par 100 50 14 Paid-in capital: Excess of issue price over par-common stock 250 125 15 Retained earnings 955 730 16 Total liabilities and stockholders' equity 1510 1065

Fixed cost can be modeled by using binary integer variable : State University must purchase 1700 computers from three vendors. Vendor 1 charges $500 per computer plus a total delivery charge of $5,000. Vendor 2 charges $350 per computer plus a total delivery charge of $4,000. Vendor 3 charges $250 per computer..

Corporate scandals involving undisclosed liabilities : We often hear of corporate scandals involving undisclosed liabilities, artificially inflated earnings statements, ethics violations, etc. The results of some of the more notorious misdeeds have had a very unfavorable impact on some shareholders' ..

The optimal inventory policy and cycle time : Demand for Sharp disposable razors at Chevere Drugs averages seven packages per day. The razors cost Chevere $0.80 per package and sell for $1.49. Chevere uses a 20% annual holding cost rate and estimates the cost to place an order for additional raz..

User Account

All Pages