Bob\'s Bakery is open for business Monday through Friday every week. In addition

Question

Bob's Bakery is open for business Monday through Friday every week. In addition to the usual fare, Bob sells a special cake that he personally bakes on weekends to meet demand the following week. Each cake costs Bob $20 to make and sells for $60. However, any cakes not sold to customers during the week will not meet Bob's quality standards and are sold to a weekend thrift bakeshop for $10 each. The weekly distribution of demand for Bob's exclusive cakes is given in the following table. How many cakes should Bob make for next week's demand?

Explanation / Answer

we can solve this using predictive probability modeling technique.....

Number of cakes (X) Probability P(X) X.P(X)

0 0.05 0

1 0.15 0.15

2 0.30 0.60

3 0.35 1.05

4 0.10 0.40

5 0.05 0.25

So number of cakes for next weekend are: 0 + 0.15 + 0.60 + 1.05 + 0.40 + 0.25 ===> 2.45 cakes for next weekend .. so (2.45 ~~ 3 cakes)

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