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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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