How many loaves of sourdough bread should make each day


Response to the following problem:

Raul's Bakery bakes sourdough bread each day. Demand on past days has followed approximately a normal distribution, with an average of 60 loaves and a standard deviation of 12 loaves. The bread sells for $2.50 per loaf and costs $1.00 to produce. Loaves of bread unsold at the end of the day are donated to a food bank and result in the bakery getting an income tax credit of $.35. If the bakery runs out of sourdough bread, it believes it will suffer a goodwill cost of $5.00 for each loaf that is demanded and is not available.

How many loaves of the sourdough bread should Raul's Bakery make each day?

 

 

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Cost Accounting: How many loaves of sourdough bread should make each day
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