Reference no: EM131737471

Noodles & Company offers shrimp as one of its protein options. Assume that each restaurant purchases frozen shrimp in large quantities and defrosts only as much as it expects to use each day. The restaurant would likely use past daily sales to estimate how much to take out for each day's business. But even then, some amount of loss could occur because shrimp should not be refrozen. Assume further that once defrosted, shrimp can be used for up to 2 days, each portion of shrimp costs $1.80, and the company wants an 80% markup on cost. If a given location takes out enough shrimp to sell 240 portions over a 2-day period and expects that as much as 10% could go bad before selling it, how should it price each portion of shrimp to account for the possible 10% loss?