1.In the pursuit of happiness, Cooper decides that the coming season is his last season to sell Q-scanners. He forecasts the demand to be Poisson with mean 3.5. Currently, he has two Q-scanners on hand (left from previous season). The producer offers him two purchasing options: (i) buy at unit price $120,000 buy before the selling season; (ii) buy at unit price $220,000 before the end of the selling season, when Cooper knows demand precisely.

(a)To minimize the expected cost, how many units should Cooper order through option (i)?

(b)To fill 98% of orders with on-hand inventory, how many units should Cooper order through option

(i)?

(c)If Cooper decides not to use either option, what is the fraction of demand he can satisfy?