Question: Robs Bakery sells its classic bread loaf for $7 per loaf that costs $3 per loaf to make. At the end of the day, Bobs
Robs Bakery sells its classic bread loaf for $7 per loaf that costs $3 per loaf to make. At the end of the day, Bobs sells all unsold bread to the nearby convenient store with a 75% discount (i.e. at 25% of its original retail price). Demand for the bread loaf is normally distributed with a mean of 100 and a standard deviation of 12. Answer the following questions based on the information given.
a. What is the underage cost? Round your answers to two decimals. For example, if your answer is 12.345, input 12.35. If your answer is 45.1234, input 45.12.
b. What is the critical ratio? Round your answer to two decimals. For example, if your answer is 12.345, input 12.35. If your answer is 45.1234, input 45.12. Do not ignore the zero before point.
c. Using your rounded answer from b, find out the z value. Round your answer to two decimals. For example, if your answer is 0.345, input 0.35. If your answer is 45.1234, input 45.12. Do not ignore the zero before point.
d. Using your rounded answer from c, what is the optimal production quantity per day for Bobs? Round your answer to one decimal. For example, if your answer is 12.345, input 12.3. If your answer is 45.1734, input 45.2.
e. Using your rounded answers from above, what is the expected sales? Round your answer to one decimal. For example, if your answer is 12.345, input 12.3. If your answer is 45.1734, input 45.2.
f. Using your rounded answers from above, what is the expected leftover inventory? Round your answer to one decimal. For example, if your answer is 12.345, input 12.3. If your answer is 45.1734, input 45.2.
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