Henrique Correa's bakery prepares all its cakes between 4 A. M.and 6 A. M.so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $16 price. The cost of baking a cake is $10, and demand is estimated to be normally distributed, with a mean of 20 and a standard deviation of 8. What is the optimal stocking level?
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