Daily Sales of Bread by Salvador Monella's Baking Company Follow

Essay

Daily sales of bread by Salvador Monella's Baking Company follow the historical pattern shown in the table below. It costs the bakery 50 cents to produce a loaf of bread, which sells for 95 cents. Any bread unsold at the end of the day is sold to the parish jail for 25 cents per loaf. Construct the decision table of conditional payoffs. How many loaves should Sal bake each day in order to maximize contribution?
$$\begin{array} { | l | c | c | c | c | c | } \hline \text { Demand } & 400 & 500 & 600 & 700 & 800 \\\hline \text { Probability } & .20 & .20 & .40 & .15 & .05 \\\hline\end{array}$$