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Savatey
2 months ago
14

A bagel company bakes a specialty bagel that it sells by the dozen every day. These specialty bagels can only be baked early in

the morning before the store opens for business. The company estimates that the daily demand (in dozens) for its specialty bagel is distributed as follows: Specialty bagels arc sold by the dozen only at a cost of $9.00 per dozen. The cost to make one bagel is $0.50. Leftover specialty bagels arc sold by the dozen the next day for a 50% discount. The optimal number of specialty bagels that should be baked tomorrow (in dozens) is:________ a) 5 dozen. b) 4 dozen. c) 3 dozen. d) 2 dozen.
Business
1 answer:
harina [3.8K]2 months ago
6 0

Response:

b) 4 dozen

Reasoning:

To determine the ideal quantity of specialty bagels, let’s calculate the expected value as follows:

We know that

Expected value = Demand × Probability

= 1 dozen × 0.10 + 2 dozens × 0.15 + 3 dozens × 0.20 + 4 dozens × 0.25 + 5 dozens × 0.30

= 0.1 + 0.3 + 0.6 + 1 + 1.5

= 3.5 dozen or 4 dozen

Consequently, option b is the correct choice.

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