Question
Refer to the last 3 questions. Suppose Foxie began with a starting inventory of 125 (her order quantity). Let us refer to the expected sales
Refer to the last 3 questions. Suppose Foxie began with a starting inventory of 125 (her order quantity). Let us refer to the expected sales as S, expected leftover as LI, expected lost sales as LS, and the quantity she started with (i.e., 125) as Q.
Also remember, we have the following data:
- fresh bagels could be sold at $4 each
- day-old bagels are sold at $1.50 each at the end of the day
- raw materials for each bagel is estimated at $2.50
- to make all customers happy, Foxie Owl gives a 25 cent discount coupon to each lost customer when shes out of bagels, for use next time
So, we can calculate her profit like this:
Add sales revenue: $4 per bagel sold * S, where S is the number of bagels sold (from previous question)
Add salvage revenue from day-old bagels: $1.50 per bagel sold as leftover * LI, where LI is the leftover inventory.
Subtract her cost of goods: $2.50 per bagel * Q, where Q is the number of bagels she starts with.
Subtract her cost of goodwill: $0.25 per lost customer * LS, where LS is the expected lost sales (unmet customer demand).
Use this information for the questions below.
QUESTIONS:
1.If Foxie keeps a starting inventory of 125, what is her sales revenue from full price sales, in dollars per day?
2.If Foxie keeps a starting inventory of 125, what is her salvage revenue from day-old bagels, in dollars per day?
3.If Foxie keeps a starting inventory of 125, what is her cost of goods, in dollars per day?
4.If Foxie keeps a starting inventory of 125, what is her total cost of goodwill for the lost customers, in dollars per day?
5.If Foxie keeps a starting inventory of 125, what is her net profit, in dollars per day?
last 3 questions:
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