Direct costs to consider and some indirect costs to business

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1. A baker bakes fresh apple pies at the beginning of everyday. At the end of the day, unsold pies are reduced in price by 70% and always sell out for this lower price instantly (discounted products are sold at a loss). If demand for pies is normal with a mean of 200 pies and standard deviation of 25 pies, find the price a fresh pie sells for. Assume a service level of 95% and that the baker purchases ingredients for $2 per pie (assume labour cost is zero).

2. Discuss the factors which are included in costs. What are direct costs to consider and some indirect costs to business?

Reference no: EM132129135

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