Question: Consider the upscale Royal Bakery which charges $ 2 5 0 for a chocolate babka ( it ' s very special ) , while the

Consider the upscale Royal Bakery which charges $250 for a chocolate babka (it's very special), while the production cost for the same babka is $100. A neighboring restaurant has agreed to buy all the chocolate babkas that are left at the end of the day at the price of $50 per babka. Note: this same restaurant will not buy any leftover cinnamon babkas.
What is the Newsvendor quantile for Royal Bakery's chocolate babkas?
150
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Question 21.66 pts
The owner of Royal Bakery seeks a customer service level of 90%. What is the implicit under-stock cost for chocolate babkas?
Please state your answer in dollars.

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