Speedy Pizza offers the delivery of a specs area at the price of $16. tax includ

Question

Speedy Pizza offers the delivery of a specs area at the price of $16. tax included To attract more customers Speedy Pizza promises that each order will be delivered within an hour with the following policy - It the pizza is not delivered witching an hour of the order, the pizza it halt price - If the pizza n not delivered within two hows of the order. the pizza a free In the past, about 3% of these deliveries were made between an hour and two hours after the order Only 1% of these delivery took more than two hours alter the order The cost for Speedy Pizza as make and deliver a pizza (including al other operational expenses) is $7. On a certain day Speedy Pizza makes 80 of these pepperbox pizzas What

Explanation / Answer

Selling Price if no late=$16----------------->prob=0.96

Selling Price if late by 1 hour=$8------------------> prob=0.03

Selling Price if late by 2 hours=0------------------>prob=0.01

Cost Price of Each Pizza=$7

Number of pizzas=80

Hence Expected Selling Price per Pizza=16*0.96+8*0.03*0*0.01=15.6

Hence Expected Profit per Pizza=15.6-7=$8.6

Hence Total Expected Profit=8.6*80=$688

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.