Demand for devilrsquos food whipped-cream layer cake at a, Operation Management

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Demand for devilrsquos food whipped-cream layer cake at a

Demand for devil’s food whipped-cream layer cake at a local pastry shop can be approximated using a Poisson distribution with a mean of four per day. The manager estimates it costs $6 to prepare each cake. Fresh cakes sell for $13. Day-old cakes sell for $6 each. What stocking level is appropriate if one-half of the day-old cakes are sold and the rest thrown out?

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