A baker must decide how many specialty cakes to bake each morning. From past experience, she knows that the daily demand for cakes ranges from 0 to 3. Each cake costs $3.00 to produce and sells for $8.00, and any unsold cakes are thrown into the garbage at the end of the day.
a. Set up a payoff table to help the baker decide how many cakes to bake.
b. Set up the opportunity loss table.
c. Draw the decision tree.