Question: Problem 12-38 (Algo) Demand for devils food whipped-cream layer cake at a local pastry shop can be approximated using a Poisson distribution with a mean

Problem 12-38 (Algo) Demand for devils food whipped-cream layer cake at a local pastry shop can be approximated using a Poisson distribution with a mean of 5.8 per day. The manager estimates it costs $24 to prepare each cake. Fresh cakes sell for $27. Day-old cakes sell for $24 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?

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