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Management Studies

Question: Every morning a baker must decide how many cakes to bake. Cakes have a shelf life of only one day and unsold cakes have no salvage value. Cakes costs $11 to make and sell at retail for $28. The baker knows that demand for cakes follows this distributions:

x	prob(x)
13	0.03
14	0.06
15	0.19
16	0.32
17	0.19
18	0.12
19	0.04
20	0.03

How many cakes should the bakes make if he wants to maximize his expected profit.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92699367

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