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Sallys 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

Sallys 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 $20 apiece. However, when the event ends, any unsold T-shirts are sold for $4 apiece. It costs Sally $8 to make a specialty T-shirt. Sallys estimate of demand is the following:

DEMAND PROBABILITY
300 0.05
400 0.10
500 0.40
600 0.30
700 0.10
800 0.05

What is the service rate (or optimal fractile)?

Note: Round your answer to 2 decimal places.

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

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