Geoff hesitated as he read the fast food menu, unsure whether he should supersize his order of delicious golden French fries. Doing so would increase his cost from $0.99 to $1.59 and just might provide him the nutrition he needed to make it through the second half of his day at the office. Of course, if he finished his hamburger and the usual amount of fries, he would simply throw the extra ones away. However, if he failed to supersize his order, he would have to take a candy bar break mid-afternoon and they weren't exactly giving them away in the break room vending machines. He would likely need two candy bars, which sold for $0.95 each. What is Geoff's target service level?
A)0.29
B)0.61
C)0.76
D)0.87

Question

Quizplus · Accepted Answer

Geoff's target service level is calculated by comparing the cost of supersizing the fries ($1.59 - $0.99 = $0.60) to the cost of buying two candy bars ($0.95 * 2 = $1.90). The service level is the probability that the additional fries will prevent the need for candy bars, calculated as $0.60 / $1.90 = 0.316, which rounds to 0.76.

Geoff Hesitated as He Read the Fast Food Menu, Unsure