Billy’s Bakery bakes fresh bagels each morning. The daily demand for bagels isa random variable with a distribution estimated from prior experience given byNumber of BagelsSold in One Day Probability0 .055 .1010 .1015 .2020 .2525 .1530 .1035 .05The bagels cost Billy’s 8 cents to make, and they are sold for 35 cents each.Bagels unsold at the end of the day are purchased by a nearby charity soup kitchenfor 3 cents each.a. Based on the given discrete distribution, how many bagels should Billy’s bakeat the start of each day? (Your answer should be a multiple of 5.)b. If you were to approximate the discrete distribution with a normal distribution,would you expect the resulting solution to be close to the answer that you obtainedin part (a)? Why or why not?c. Determine the optimal number of bagels to bake each day using a normal approximation. (Hint: You must compute the mean and the variance 2 of thedemand from the given discrete distribution.)
Billy’s Bakery bakes fresh bagels each morning. The daily demand for bagels is
a random variable with a distribution estimated from prior experience given by
Number of Bagels
Sold in One Day Probability
0 .05
5 .10
10 .10
15 .20
20 .25
25 .15
30 .10
35 .05
The bagels cost Billy’s 8 cents to make, and they are sold for 35 cents each.
Bagels unsold at the end of the day are purchased by a nearby charity soup kitchen
for 3 cents each.
a. Based on the given discrete distribution, how many bagels should Billy’s bake
at the start of each day? (Your answer should be a multiple of 5.)
b. If you were to approximate the discrete distribution with a
would you expect the resulting solution to be close to the answer that you obtained
in part (a)? Why or why not?
c. Determine the optimal number of bagels to bake each day using a normal approximation. (Hint: You must compute the mean and the variance 2 of the
demand from the given discrete distribution.)
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