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Question 4) A bakery produces croissants each morning and they can sell the croissants only during the day (fresh). The daily demand is random and
Question 4) A bakery produces croissants each morning and they can sell the croissants only during the day (fresh). The daily demand is random and have a distribution given in the below table, calculated based on the previous sales data. Baking one croissant costs 8 cents and they sell one croissant at a price of 35 cents. The croissant unsold at the end of the day are purchased by a charity shop at a price of 3 cents. a. Based on the given discrete distribution calculate the number of croissants to be baked each day, to maximize their expected profit. (round your answer to the closest multiple of 5). (Answer: Q=25 croissants) b. If you would approximate the probabilistic distribution by normal distribution, would you expect the resulting solution to be close to the answer that you obtained in part (a) ? Why ? Why not? (No numerical answer) c. Determine the optimal number of croissants to bake each day using a normal approximation. (Hint: first calculate the mean and variance of the demand given in the discrete distribution table) (Answer Q=27 )
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