Swanson’s Bakery is well known for producing the best fresh bread in the city, so the sales are very substantial. The daily demand for its fresh bread has been forecasted to be 550 units on average with a standard deviation of 70 loaves and that the normal distribution is a reasonable representation of demand. The bread is baked in the early morning, before the bakery opens for business, at a cost of $2 per loaf. It then is sold that day for $3 per loaf. Any bread not sold on the day it is baked is relabeled as day-old bread and sold subsequently at a discount price of $1.50 per loaf.
Determine the optimal number of loaves to bake each morning.