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 five per day. The manager estimates it costs $8 to prepare each cake. Fresh cakes sell for $14. Day-old cakes sell for $8 each. What stocking level is appropriate if one-half of the day-old cakes are sold and the rest thrown out? Use Table C.

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