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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
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:
Demand Probability
dozens
Specialty bagels are sold by the dozen only at a cost of $ per dozen.
The cost to bake each bagel is $
Leftover specialty bagels are sold by the dozen the next day for a discount.
The bagel company's cost of underestimating demand, Cu is
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