Gina starts a new home-based bakery business to sell hand-made toasts and biscuits. Each toast is sold at $6 and costs $2 to make. If she has any unsold toasts after 9 pm, they will be offered at $1 per toast until all remaining toasts are sold. Based on her experience, the daily demand for the toasts can only be 40, 60, 80, 100, or 120. The probabilities for different demand is shown below. Table 1: Probabilities of Demand for Toasts Demand Probability 40 15% 60 25% 80 100 120 20% 10% (a) What is the probability when demand is 80? Calculate the number of toasts Gina should make to maximise the expected profit of selling toasts. If she decides to donate, all the toasts left after 9 pm, to a food bank, for free, how many toasts should she make to maximise the expected profit? (b) Would you recommend Gina to adopt a pull system to manage its inventory of the flour, one of their main baking ingredient? Explain with supporting reasons. LOG203 Copyright ©2021 Singapore University of Social Sciences (SUSS) Timed Online Assignment - July Semester 2021 Page 3 of 7 (c) Discuss how the postponement concept can be applied to Gina's bakery to reduce cycle stocks. State any possible issues that may arise while applying postponement.

Gina starts a new home-based bakery business to sell hand-made toasts and biscuits. Each toast is sold at $6 and costs $2 to make. If she has any unsold toasts after 9 pm, they will be offered at $1 per toast until all remaining toasts are sold. Based on her experience, the daily demand for the toasts can only be 40, 60, 80, 100, or 120. The probabilities for different demand is shown below. Table 1: Probabilities of Demand for Toasts Demand Probability 40 15% 60 25% 80 100 120 20% 10% (a) What is the probability when demand is 80? Calculate the number of toasts Gina should make to maximise the expected profit of selling toasts. If she decides to donate, all the toasts left after 9 pm, to a food bank, for free, how many toasts should she make to maximise the expected profit? (b) Would you recommend Gina to adopt a pull system to manage its inventory of the flour, one of their main baking ingredient? Explain with supporting reasons. LOG203 Copyright ©2021 Singapore University of Social Sciences (SUSS) Timed Online Assignment - July Semester 2021 Page 3 of 7 (c) Discuss how the postponement concept can be applied to Gina's bakery to reduce cycle stocks. State any possible issues that may arise while applying postponement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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