Mountain Ski Sports, a chain of ski equipment shops in Colorado, purchases skis from a manufacturer each summer for the coming winter season. The most popular intermediate model costs $150 and sells for $260. Any skis left over at the end of the winter are sold at the store’s half-price sale (for $130). Sales over the years are quite stable. Gathering data from all its stores, Mountain Ski Sports developed the following probability distribution for demand.
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Bev’s Bakery specializes in sourdough bread. Early each morning, Bev must decide how many loaves to bake for the day. Each loaf costs $0.75 to make and sells for $2.85. Bread left over at the end of the day can be sold the next for $1.00. Past data indicate that demand is distributed as follows:
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