Kroger at Scottsville Road makes fresh pumpkin pies each morning. The daily demand for these pies is a random variable with a distribution estimated from manager Mike's experience given by Number of pumpkin Probability
pies sold in one day
0.05 0.15 0.10 0.05 0.20 0.10 0.15 0.05 0.10 0.05
Mike knows that the cost of making one pumpkin pie is about $4. In the store, pumpkin pies are sold for $10 each. At the end of the day, unsold pumpkin pies are sold to Bowling Green food bank for $1 each.
a. How many pumpkin pies should Kroger make at the start of each day?
b. Determine the average number of pumpkin pies sold to Bowling Green food bank (Average Overstock).
c. Determine the average number of customers turned away (Average Understock).
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