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?

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter2: Mathematics For Microeconomics
Section: Chapter Questions
Problem 2.16P
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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?
Transcribed Image Text: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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