Problem: 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 5.6 per day. The manager estimates it costs $23 to prepare each cake. Fresh cakes sell for $26. Day-old cakes sell for $23 each. Use Table C.
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.)
2. What stocking level is appropriate to achieve this service level?