Response to the following problem:
The coffee roaster at Pete's Coffee can roast 600 pounds of coffee per day. Pete's is open 310 days per year, and, because of freshness requirements, the store never roasts more than a 1 0 -day supply of any type of coffee it sells. Daily demand for French Roast coffee averages 75 pounds, while daily demand for Amaretto Cream averages 20 pounds. The annual holding cost for a pound of roasted coffee is $1.28, and the production setup cost for roasting a new variety of coffee is $25.
Determine the optimal production batch sizes for French Roast and Amaretto Cream coffees.