Question
Scenario: George takes an eclectic mix of spices to make his authentic jerk seasoning as a rub for chicken, pork, and fish. The ingredients and
Scenario:
George takes an eclectic mix of spices to make his authentic jerk seasoning as a rub for chicken, pork, and fish. The ingredients and packaging cost $1.50, and he sells the packets by the case to Jerk Stores in the Caribbean for $2.50 per packet. Tourists to the islands gladly pay $8.75 for these packets, eager to host their friends for an authentic Caribbean meal and bore them with vacation photos upon their return. The tourists' demand for the packets is normally distributed, with a mean of 2500 packets and a standard deviation of 600.
Questions:
A.) Assume that George and one of the independent Jerk Stores get into on a revenue-sharing contract such that George sells the packets for $2.00, however, receive 5% of the revenue of the Jerk Store. Under this scenario, what is the optimal quantity for the store to order?
B.) One of the independent store owners realizes that they can persuade the tourists to buy their handwritten authentic "secret" recipe cards along with the jerk seasoning for additional revenue of $0.10 per card. How does this opportunity affect the store's order quantity?
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