Srinivasa Iyengar’s Bakery in Bangalore makes ‘aloogedde buns’, one of its fast selling products. From the past history, Srinivasa Iyengar estimates the demand pattern to be as follows:

Demand Probability of Demand 400 0.05 500 0.10 600 0.20 700 0.30 800 0.20 900 0.10 1000 0.05 The selling price of each bun is Rs. 4.00. The buns that are not sold on the day they are made, are sold the next day as old buns at a reduced price of Rs. 2.50 each. If the cost of each bun is Rs.3.10, what is the optimum number of buns Iyengar should make?