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The question is also in the file attached to this. 1. A major snack company produces variety of cakes and cookies that are sold in

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The question is also in the file attached to this.

1. A major snack company produces variety of cakes and cookies that are sold invarious grocery stores and online stores. One of the famous products of this company is dark chocolate delight, which is a snack cake. The cakes are individually packed and sold in boxes of dozens. The machinery used to produce this product is 20 years old. Over the time, the variation in weight of cakes produced gradually increased. The weight of individual cake listed as 50 grams and the actual weight follows normal distribution with mean of 56 grams and standard deviation of 2 grams. The production process is set at 56 grams to limit the percentage of cakes that are underweight. As we know increased variation will result in increased waste. The ingredients cost about $0.0032 per gram of cake. The company current produces 24,000 dark chocolate cakes (that is 2000 boxes of dozen cakes) each day and makes a profit of $ 0.50 per box sold.

The company is considering replacing existing machinery with the new equipmentwhich will increase daily production rate by 25%. With the new equipment the variance of cake weight would be 2.56 grams2. Senior marketing leaders are convinced that the demand for dark chocolate delight is very high and selling more boxes would not be a problem. The cost of new machinery including installation is$500,000.

As team reporting to CFO of the company, which option you would recommend (staying with old equipment or buying new equipment). Please justify your cession with statistical analysis.

image text in transcribed Case study/Technical Paper Review (Team Exercise - Due on November 23rd) 1. A major snack company produces variety of cakes and cookies that are sold in various grocery stores and online stores. One of the famous products of this company is \"dark chocolate delight\

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