Arrowmark Vending has the contract to supply pizza at all home football game titles for a university or college in the Big 12 atheletic conference. It is a constant problem at each video game to determine just how many pizzas to have sold at the game titles. Tom Kealey, operations director for Arrowmark, has determined that his fixed expense of providing pizzas, whether this individual sells you pizza or perhaps 4000 pizza, is $1, 000. This cost includes hiring personnel to work at the concession booths, hiring extra personnel to prepare the pizzas the day with the game, delivering them to the overall game, and advertising during the video game. He feels that this price should be similarly allocated among two types of pizzas.
Tom has determined that he may supply just two types of pizzas: basic cheese and pepperoni and cheese combo. His expense to make a plain cheese pizza is $4. 50 every, and his price to make pepperoni and dairy products combo can be $5. 00 each. Both pizzas promote for $9. 00 in the game. Unsold pizzas have no value and are donated to a local shelter intended for the destitute.
Past encounter has shown this demand distributions for the two types of pizza at home games:
Plain Cheese Demand/Probability
200 / 0. 1
300 / 0. 12-15
400 / 0. 15
500 as well as 0. two
600 / 0. two
700 as well as 0. 1
800 as well as 0. 05
900 / 0. 05
Pepperoni and Cheese Require / Probability
300 as well as 0. one particular
400 as well as 0. two
500 / 0. twenty-five
600 as well as 0. 25
700 as well as 0. 15
800 as well as 0. 05
1) For every type of pizza, determine the profit (or loss) associated with generating at each feasible demand level. For instance, determine the profit if 200 ordinary cheese pizza are made, and 2 hundred are demanded. What is the money if 200 plain parmesan cheese pizzas will be produced, although 300 were demanded, etc.
2) Compute the anticipated profit connected with each conceivable production level (assuming Mary will only create at among the possible require levels) for every type of pizzas.