Question

The local student chapter decides to hold a bake sale at Mall in front . The members agree to sell all baked goods for $2.00 each. They discover through a study that demand is distributed N (225, 20^2). Each baked good costs $0.25 to buy and sells that day for $2.00. If they don’t sell all the inventory, each unsold baked good is donated at a revenue per item of $0.00. They estimate that a lost sale costs them the lost $1.75 revenue over the $0.25 to get the baked goods.

a) Make a recommendation to this group for an optimal strategy.

b) Then, imagine they sell items for 20 days. Can they fund a trip to the national conference? Why or why not?

C) A local bakery offers to buy all unsold baked goods at $.50 per item. How much can they make in an average month’s 20 day bake sale?

Answer 1

The local student chapter decides to hold a bake sale at Mall in front . The members agree to sell all baked goods for $2.00 each.