|
DAILY DEMAND
|
PROBABILITY
|
|
15
|
0.08
|
|
20
|
0.12
|
|
25
|
0.25
|
|
30
|
0.20
|
|
35
|
0.20
|
|
40
|
0.15
|
Each batch costs the Paris Bakery $50 and can be sold for $100. The Paris Bakery can sell any unsold batches for $25 the next day.
(a) Simulate 1 month (25 days) of operation to calculate the bakery's total monthly profit. Replicate this calculation N times to compute the average total monthly profit.
(b) The Paris Bakery would like to investigate the profitability of baking 25, 30, 35, or 40 batches at the start of the day. Which quantity would you recommend? Why?