[ABrandt]

This is true, we did put quite a bit of effort into properly forecasting demand. At the end of each day I'd count every piece of food we had left, feed that into some software along with some variables such as weather, and try to calculate what we needed to bake that night. Turns out even with an extremely short forecasting horizon, it's damn near impossible to accurately predict how much fresh bread people want in any given day at a particular store. (I'm not sure if we did use one standard deviation, and if we did that would only account for 68.3% of variation anyways). I've literally been screamed at for not having any whole-grain bread left 10 mins. before closing time.

If I was to manage this non-profit store, I wouldn't bake according to expected demand. In this particular scenario, a reasonable amount of stock-outs would mean that you have more money left at the end of the day to donate to charity rather than covering the production costs of waste. (Of course you would want to avoid creating ill-will with too much stock-out).

But the real reason this makes sense for Panera is that they're already donating a ton of goods to charity everyday. For this store, instead of donating bread, they'll be donating cold hard cash that people fork over. Great PR and great for the community.