Background: In some small markets, Hardees sells fried chicken in the evenings

by | Nov 25, 2021 | Other | 0 comments

Background: In some small markets, Hardees sells fried chicken in the evenings in small towns where there is not may options for residents to buy their excellent product. Since fried chicken is not their main market, they must decide each day how much chicken they will sell that day. According to their menu, they sell fried chicken from 4:30 pm through 8:00 pm. To keep it simple, Hardees sells an order of chicken for $5.00. Each order of chicken costs them $4.00 to buy, cook, and package. Since the chicken is isn’t able to be kept the next day, it is simply given to employees. Based on past history, Hardees estimates that they can sell 400 orders of chickens in an average day with a standard deviation of 300 orders. POST: Based on the types of calculations in the “Newsboy Problem” in Chapter 13:
1. How many orders of chicken should Hardees prepare each day to maximize profit?
2. After taking this class, the manager of Hardees considers the concept of salvage value and posts a sign on the take-out at 8:00 PM noting you can get an order of Chicken for $2.50 until they run out. Does that change the number of orders of chicken that Hardees should prepare?
3. Calculate the expected profit of each scenario in a and b- and recommend a course of action.


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