is low $(20,000),$ the bakery will sell only $20,000$ units but will incur the costs of producing $32,000$ units. The corresponding gross profit will be $$5\mathrm{.}19(20,000)-$$$2\mathrm{.}45(32,000)=$$$25,400.$

I. Calculate payoffs and EMV

a$.$ Calculate the payoff $($daily gross profit, in dollars$)$ for each production$/$demand level combination and complete the following payoff table.

$\backslash$table$[[,$Low Demand,Medium Demand,High Demand$],[\backslash$table$[[$Light$],[$Production$]],,,],[\backslash$table$[[$Moderate$],[$Production$]],,,87680],[\backslash$table$[[$Heavy$],[$Production$]],,,87550]]$

b$.$ After some deliberation, the bakery's manager arrived at the following probabilities of the states of nature $($outcomes$)$:

$P($ Low Demand $)=0\mathrm{.}6$

$P($ Medium Demand $)=0\mathrm{.}1$

$P($ High Demand $)=0\mathrm{.}3$