A bakery has determined that the number of loaves of its whitebread demanded daily has a normal distribution with mean 7,200loaves and standard deviation 300 loaves. Based on costconsiderations, the company has decided that its best strategy isto produce a sufficient number of loaves so that it will fullysupply demand on 94% of all days.a. How many loaves of bread should the company produce?b. Based on the production in part (a), on what percentage ofdays will the company be left with more than 500 loaves ofunsold bread?

Answered: a. How many loaves of bread should the…

a. How many loaves of bread should the company produce? b. Based on the production in part (a), on what percentage of days will the company be left with more than 500 loaves of unsold bread?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A bakery has determined that the number of loaves of its white
bread demanded daily has a normal distribution with mean 7,200
loaves and standard deviation 300 loaves. Based on cost
considerations, the company has decided that its best strategy is
to produce a sufficient number of loaves so that it will fully
supply demand on 94% of all days.
a. How many loaves of bread should the company produce?
b. Based on the production in part (a), on what percentage of
days will the company be left with more than 500 loaves of
unsold bread?

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Step 2: a. Determine the loaves of bread should the company produce:

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Step 3: b. Determine percentage of days will the company be left with more than 500 loaves of unsold bread:

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