What are the levels of inventory appropriate for each level

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Reference no: EM131919020

A popular ice cream parlor is considering measures to increase the level of service.

Demand for its ice cream can be approximated by a normal distribution with a mean of 800 gallons per period and a standard deviation of 50 gallons per period.

The new management desires to increase the level of service from 90% to 95%. The additional revenue the increase would produce would be $ 150. The annual cost of carrying one gallon in inventory is $ 5.

What are the levels of inventory appropriate for each level of service?

Reference no: EM131919020

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