4) The local cinema includes a break in any movie over two hours. During this break,...

 

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4) The local cinema includes a break in any movie over two hours. During this break, long lines build up in front of the concession stand, to the degree that some customers cannot get food before the movie continues. a) Assuming the number of customers follows a Poisson distribution with mean 9 and that one stand can serve up to 8 customers during the break, how many sales on average are lost due to the limited capacity of the stand? (Hint: Use the Poisson Loss function given below). b) The manager is considering whether to open a second concessions stand. He estimates that each customer on average produces a profit of $2 before accounting for the fixed operation cost of a stand, which costs the cinema $5 per movie and stand. The food at the concession stand is durable (i.e., there is no overstocking cost). Should the cinema open a second concession stand be opened? (Hint: The profit without fixed operating costs per stand for either option can be calculated using the loss function for the Poisson distributions below.) Poisson Loss function: Q 8 16 Loss Function with mean 9 1.73015 0.02063 4) The local cinema includes a break in any movie over two hours. During this break, long lines build up in front of the concession stand, to the degree that some customers cannot get food before the movie continues. a) Assuming the number of customers follows a Poisson distribution with mean 9 and that one stand can serve up to 8 customers during the break, how many sales on average are lost due to the limited capacity of the stand? (Hint: Use the Poisson Loss function given below). b) The manager is considering whether to open a second concessions stand. He estimates that each customer on average produces a profit of $2 before accounting for the fixed operation cost of a stand, which costs the cinema $5 per movie and stand. The food at the concession stand is durable (i.e., there is no overstocking cost). Should the cinema open a second concession stand be opened? (Hint: The profit without fixed operating costs per stand for either option can be calculated using the loss function for the Poisson distributions below.) Poisson Loss function: Q 8 16 Loss Function with mean 9 1.73015 0.02063

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Part a Average Lost Sales Lost CustomersWe need to find the probability of having more than 8 custom... View the full answer