Question: Demand for devils food whipped-cream layer cake at a local pastry shop can be approximated using a Poisson distribution with a mean of 6.4 per
Demand for devils food whipped-cream layer cake at a local pastry shop can be approximated using a Poisson distribution with a mean of 6.4 per day. The manager estimates it costs $27 to prepare each cake. Fresh cakes sell for $30. Day-old cakes sell for $27 each. Use Table C.

a-1. Assume one-half of the day-old cakes are sold, and the rest thrown out. What service level is achieved in this situation? (Round your answer to 2 decimal places.)
a-2. What stocking level is appropriate to achieve this service level?
Table C (concluded) \x 0 1 N 4 5 OP 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3.0 3.2 3.4 3.6 3.8 .199 171 .147 .126 .107 .916 .895 .871 1.000 1.000 .999 .999 1.000 4.0 4.2 4.4 4.6 4.8 .092 .078 .066 .056 .720 1.000 .686 .651 .048 5.0 5.2 5.4 5.6 5.8 1.000 1.000 1.000 .999 .999 6.0 6.2 6.4 6.6 6.8 7.4 7.6 7.8 1.000 8.0 8.2 8.4 8.6 8.8 .998 .998 .997 .997 .995 1.000 1.000 1.000 .142 128 .116 ,089 .995 .991Step by Step Solution
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