Alison's Donut Shop makes fresh donuts each morning. Leftover donuts at the end of each day are discarded. Alison sells two kinds of donuts: (1) chocolate covered and (2) chocolate covered with sprinkles. Daily demand for chocolate covered donuts is gamma-distributed with mean 50 and standard deviation 7, and demand for chocolate covered donuts with sprinkles is Gamma distributed with mean 30, standard deviation 5. Alison has decided to try to maintain a 95% cycle service level. Suppose Alison decides to make only chocolate covered donuts (without sprinkles) in the morning and add sprinkles at the time of customer request. Also, suppose that demands for the two different types of donuts are independent. 

How much safety stock in chocolate covered donuts is she carrying at this same 95% cycle service level? 

Answer rating: 100% (QA)

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