Center City Cake Shoppe spends $$15$ in making each cake, and has a regular selling price of $$25.$

For every customer facing a stockout, the Cake Shoppe has estimated that there is a goodwill loss of $$5($over and above the lost margin on that sale$).$

Unsold cakes at the end of the day are sold below cost, at $$10,$ and are always sold off before the store closes for the night.$$

Given this data, is $90\%$ service level the appropriate service level? Remember, their daily demand distribution is:

DemandProbability$50\mathrm{.}1060\mathrm{.}1570\mathrm{.}2580\mathrm{.}2590\mathrm{.}15100\mathrm{.}10$

Group of answer choices

$90\%$ is too low.

$90\%$ is too high.

$90\%$ is high, but because of rounding, the effective service level will be $90\%.$

Not enough information.