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The Kiosk charges $6.00 for each sandwich, which are all made before the lunch crowd arrives. Virtually all sandwich customers also buy a soda
The Kiosk charges $6.00 for each sandwich, which are all made before the lunch crowd arrives. Virtually all sandwich customers also buy a soda that is sold for $2. The sandwiches cost the Kiosk $2.50, while sodas cost the Kiosk 50. Kiosk management is very sensitive about the quality of food they serve. Thus, they maintain a strict "No Old Sandwich" policy, so any sandwich left at the end of the day is disposed of. a. (10 points) Suppose sandwich customers buy their snack somewhere else if the Kiosk is out of stock. How many fresh sandwiches should the Kiosk make for the lunch crowd? First compute what cu and co are and then assess Q* b. (10 points) Suppose that any customer unable to purchase a sandwich settles for a lunch of Pop-Tarts and a soda. Pop-Tarts sell for $1.75 and cost the Kiosk 0.75. As Pop-Tarts and soda are easily stored, the Kiosk never runs out of these essentials. Assuming that the Kiosk management is interested in maximizing daily profits, how many fresh sandwiches should they prepare at the lunch-hour given the variability in Demand? First compute what cu and co are and then assess Q*.
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