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Sally's Silk Screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming

Sally's Silk Screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event, Sally can sell T-shirts for $16 apiece. However, when the event ends, any unsold T-shirts are sold for $4 apiece. It costs Sally $10 to make a specialty T-shirt. Sally's estimate of demand is the following:

Demand

Probability

300

0.10

400

0.20

500

0.40

600

0.15

700

0.10

800

0.05

a) What is the service rate (Please keep two digits after the decimal and don't omit 0 before the decimal, e.g., 0.39)?

b) How many T-shirts should she produce for the upcoming event?

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