A bakery makes fresh donuts every morning.If any are left at the end of the day they are donated to a homeless shelter.The number of donuts that can be sold each day is uncertain and the bakery must decide early each morning,how many donuts to make that day.The bakery has created the following payoff table to summarize the situation. It estimates the following probabilities for the respective levels of demand. The expected value of A₂ (making a medium number of donuts)is 186.

Question

Quizplus · Accepted Answer

The expected value of A₂ (making a medium number of donuts) is 186, which means that, on average, the bakery would earn $186 per day if they make a medium number of donuts. Therefore, the statement is true.

A Bakery Makes Fresh Donuts Every Morning