C$.$

D$.$

Cheryl should build the facility. If demand proves to be low, then $7$ to stimulate demand.

b$)$ What is the value of this expected payoff?

The expected payoff is $$,($round your response to the nearest dollar$).$

Chicago's Hard Rock Hotel distributes a mean of $1,200$ bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of $105$ towels per day, based on occupancy. The laundry firm that has the linen contract requires a $4-$day lead time. The hotel expects a $99\%$ service level to satisfy high guest expectations. Refer to the standard normal table for z$-$values.

a$)$ What is the reorder point? towels $($round your response to the nearest whole number$).$

b$)$ What is the safety stock? $q,$ towels $($round your response to the nearest whole number$).$