The optimal number of packs of candy for Jim to produce, given the sales data is D. 12 packs.
How to find the amount produced ?
To determine the optimal number of candy packs Jim should produce, calculate the expected profit for each possible demand level.
Selling price per pack
= $4
- Cost to make each pack
= $1.2
Profit per pack = Selling price - Cost
= $4 - $1.2
= $2.8
Using the options, find the highest profit from the packs 9, 10, 11, and 12:
For 9 packs: $23.436
For 10 packs: $24.864
For 11 packs: $25.872
For 12 packs: $26.656
Producing 12 packs of candy results in the highest expected profit of $26.656 which makes this the optimal production.
Options include:
A. 9
B. 10
C. 11
D. 12