Potter James is the owner of Potter Patisserie, a pastry shop located just off the historic town
Question:
Potter James is the owner of Potter Patisserie, a pastry shop located just off the historic town square.
Business has not been good lately as would-be customers frequently leave the store disgruntled whentheir preferred pastries are not in stock. At the same time, costs have soared as Potter has had todispose of left-over pastries. Potter remembered that you are logistics whiz and decides to ask you foryour help. Potter buys kouign-amanns for $2.25 a piece and resells them for $4.20. Potter likes to sellfresh pastries, so he throws away any leftovers at the end of the day.
1. Looking at Potter’s sales records from the last month, you estimate that average daily demand is62 kouign-amanns with a standard deviation of 14 kouign-amanns.
a. Using excel, please create a column of expected demand and the probabilities ofrealizing those demands.
b. Provide a scatter plot with expected demand as the x-axis and probabilities of realizingthose demands on the y-axis.
c. Assume that Potter decides to order 62 kouign-amanns.
i. Estimate the sales for each demand realization
ii. Calculate costs for ordering 62 kouign-amanns
iii. What is the expected profit for each demand realization? What is the total ofthose profits?
d. Using solver, find the optimal order quantity of kouign-amanns Potter should order.What is the total profit?
Principles of Taxation for Business and Investment Planning 2019 Edition
ISBN: 9781260161472
22nd edition
Authors: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan