Average daily loss of sales to university falafel

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Reference no: EM132235066

Columbia Pizza has one oven that can make a whole pie in about 10 minutes. Their late-night business among hungry college students is booming, and from 9 pm – 11 pm, they average 8 pie orders per hour. However, from 5 pm – 9 pm, they average only 5 pie orders per hour. Both order rates can be assumed arrive according to a Poisson distribution.

The owner of Columbia Pizza has discovered that if people have to wait for more than 20 minutes from when they get in the door to when they receive their pie, they are likely to simply go next door to University Falafel, meaning that Columbia Pizza would lose out on their $10 sale.

Calculate the average daily loss of sales to University Falafel?

Reference no: EM132235066

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