Neilsen Cookie Company Sells Its Assorted Butter Cookies in Containers

question 21

Multiple Choice

Neilsen Cookie Company sells its assorted butter cookies in containers that have a net content of 1 lb.The estimated demand for the cookies is 1,000,000 1-lb containers.The setup cost for each production run is $250, and the manufacturing cost is $.30 for each container of cookies.The cost of storing each container of cookies over the year is $.20. Assuming uniformity of demand throughout the year and instantaneous production, how many containers of cookies should Neilsen produce per production run in order to minimize the production cost?
Hint: Show that the total production cost is given by the function .
Then minimize the function on the interval (0, 1,000,000) .

• A)50,000
• B)40,000
• C)45,000
• D)35,000

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Definitions:

Cash Receipts

Money received by a business, recorded in its financial statements, typically from transactions such as sales or services rendered.

Cash Sales

Transactions where payment is made in cash (or equivalent) at the time of sale, with no delay in payment.

Internal Control

Processes and procedures implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Cash Remittances

Money transfers from one party to another, often sent by individuals working abroad to their family back home.