A Local Barbecue Joint Makes One Massive Batch of Potato

question 72

Multiple Choice

A local barbecue joint makes one massive batch of potato salad each day. If they run out of this savory side before the end of the day, their last few customers are less than satisfied, but if they make too much, they sell it to the local hog farmer for feed. Every serving costs an equivalent of $0.23 to make, but can be sold for $2.50 to customers and for $0.12 to the hog farmer. The average daily demand is for 400 servings with a standard deviation of 40 servings. How many servings should be made each day?

• A)467
• B)453
• C)462
• D)455

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Definitions:

Oversubscription

The situation in which the demand for an initial public offering (IPO) of company shares exceeds the quantity available.

Share Offer

The issuance of shares by a company to existing or potential investors, often to raise capital for business operations or expansions.

Calls in Advance

Money received by a company from shareholders before their shares have been issued to them, often applied towards future calls on shares.

Share Issuance Costs

Expenses associated with the issuance of new shares, such as underwriting, legal, and registration fees.