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Warren Hesitated as He Read the Fast Food Menu, Unsure

question 40

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Warren hesitated as he read the fast food menu, unsure whether he should supersize the orders of delicious golden French fries. As the office lunch boy, he was responsible for buying enough food to keep his coworkers satiated during the rest of the work day. Supersizing would increase his cost from $0.99 to $1.59 and just might provide his colleagues the nutrition they needed to make it through the second half of their day at the office. Of course, if they finished their hamburger and the usual amount of fries, Warren would simply throw the extra ones away. However, if he failed to supersize the orders, he would have to purchase candy bars during the afternoon and they weren't exactly giving them away in the break room vending machines. Each hungry colleague would likely need two candy bars, which sold for $1.25 each. With a demand that is normally distributed with a mean of 15 and standard deviation of five, what is Warren's optimal supersize decision?


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