What sort of arrangements to make with Charlie and/or Bowdale catering department to maximize the profits? What these maximum profits will be? And how much it would cost her not follow the recommendations?

In order to achieve profit maximization, firstly, we employed linear regression method to forecast the demand for the next three weeks (i.e. week 11, 12 and 13) (see attachment 1).

Then, we come up three proposals to investigate the amount of profits achieved (see attachment 2).

For the current practice, we simply based on the existing amount of orders (i.e. 4 dozens from Monday to Thursday, 6 dozens from Friday to Saturday), and then calculated the amount of profit achieved by using the selling price of each cake is 60 pence and the cost of each cake is 25 pence. The net profit achieved for proposal A is $5,340.

For proposal A, we based on the existing amount of orders (i.e. 4 dozens from Monday to Thursday, 6 dozens from Friday to Saturday), and then calculated the amount of profit achieved by using the selling price of each cake is 60 pence and the cost of each cake is 25 pence, with the additional strategy of re-selling the unsold cake to the University of Bowdale at the price of 15 pence of each cake. The net profit achieved for proposal A is $6,345.

For proposal B, we changed the amount of orders for Wednesday from 4 dozens to 3 dozens, whilst the amount of orders for Monday, Tuesday and Thursday are remained at 4 dozens, 6 dozens from Friday to Saturday), and then calculated the amount of profit achieved by using the selling price of each cake is 60 pence and the cost of each cake is 25 pence, with the additional strategy of re-selling the unsold cake to the University of Bowdale at the price of 15 pence of each cake. The net profit achieved for proposal B is $7,605.

For proposal C, we changed the amount of orders for Wednesday from 4 dozens to 3 dozens, whilst the amount of orders for Monday, Tuesday and Thursday...