2. Each morning, the manager of a bakery has to decide how many cakes they shouldbake for sale that day. The manager knows that on any given day, the demand forcake is a random variable taking the values 0, 1, 2, 3, 4, 5, 6 and 7, each with probability1/8. He also knows that he will make a profit of $2 for each cake that he sells, and aloss of $0.75 for each cake he bakes but doesn't sell. Find the expected profit for theday if he chooses to bake(a) one cake;(b) two cakes;(c) three cakes;(d) four cakes;(e) five cakes;(f) six cakes;(g) seven cakes.How many cakes should he choose to make in order to maximize his expected profit?Hint: If the demand for cake exceeds to the number of cakes baked, how many cakesare sold?

The random variable X indicates the demand for a cake. It takes values 0, 1, 2, 3, 4, 5, 6 and 7,…

Answered: 2. Each morning, the manager of a…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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