wrong Answer down'vote

3. The Hot-Bake shop sells only bread made that day. Each loaf produced has a variable cost of 30p and sells for 50p. Any bread unsold at the end of each day is thrown away. At the start of each day, the manager must decide how many loaves to produce. The table below records sales over the past month: Daily sales Frequency 1000 6 1200 10 1400 10 1600 4 (a) Fixed costs are estimated at X per day. Find the breakeven number of loaves produced and sold, and the number if expected daily profit was 50. (b) Find the number of loaves produced to minimise expected opportunity loss. (c) Bread is produced by a fully automated machine which mixes the dough, divides it into 1 lb units, fills each baking tin and passes them through an oven. Out of each batch, some are rejected for being underweight or burnt. The proportion rejected has the probability distribution given below: Proportion rejected Probability 0.05 0.25 0.10 0.60 0.15 0.15 (i) Find the number of loaves produced if the expected num- ber of saleable loaves equals your answer to question (b). (ii) The services of a maintenance engineer would set the rejection rate equal to 0.05, but would cost 11 per day. Advise the manager on whether to engage the engineer or not, if the desired daily production is 1300. (d) Comment on the assumptions underlying your answers, and discuss the relevance of other decision criteria. 4. Profit is the maximum value a company can distribute during the year and still expect to be worth as much at the end of the year as it was at the beginning.' Discuss this statement, and comment on its value in measuring profit for decision-making