Question

Your friend has a fabulous recipe for salsa, and he wants to start packing it up and selling it. He can rent the back room of a local restaurant any time he wants, complete with their equipment, for $100 per time. It costs him $2 a jar for the materials (ingredients for the salsa, jars, labels, cartons) and labor (you and a couple of friends of his) for each jar he makes. He can sell 12,000 jars of salsa each year (I told you it was a fabulous recipe!), with a constant demand (that is, it's not seasonal; it doesn't vary from week to week or month to month). It costs him $1 a year per jar to st

Answer 1

tore the salsa in the warehouse he ships from. He wants to find the number of jars he should produce in each run in order to minimize his production and storage costs, assuming he'll produce 12,000 jars of salsa each year. Post your suggestions on how would you help him figure this out.