Question
You have the following information for a street vendor selling bananas. They can only be sold on the day the vendor purchases them, i.e.
You have the following information for a street vendor selling bananas. They can only be sold on the day the vendor purchases them, i.e. not carried over to the next day. However, there is a salvage value from selling unsold bananas to a local processor. The processor pays $0.10 per banana when less than 15 bananas are dropped off, and $0.20 per banana when 15 or more bananas are dropped off. Vendor information Average daily sales Standard deviation of daily sales 400 100 Price per banana $1.00 Cost per banana $0.50 Salvage value scenarios a) if between 1 and 15 bananas are left over $0.10 b) if 15 or more bananas are left over $0.20
Step by Step Solution
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Step: 1
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Step: 2
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