Refer to Exercise 22.7. Assume that the probability of each value of demand is the same for all possible demands.
a. Determine the EMV decision.
b. Determine the EOL decision.

In exercise 22.7

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.