What is optimal probability of having enough wedding cakes

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Reference no: EM132174340

A. The injection molding department of a company that operates 24x7 uses an average of 37 gallons of special lubricant per day. The usage of lubricant is normally distributed with a standard deviation of 7.8 gallons per day and it takes 2.2 weeks for an order of lubricant to be delivered.

-If the target service level is 72%, what is the reorder point?

B. The injection molding department of a company that operates 24x7 uses an average of 47 gallons of special lubricant per day. The usage of lubricant is normally distributed with a standard deviation of 9.3 gallons per day and it takes 3.4 weeks for an order of lubricant to be delivered.

-If the company can tolerate a probability of stockout equal to 4%, what is the reorder point?

C. Ned's chain of natural food stores sells shelled peanuts by the pound. Historically, Ned has observed daily demand is normally distributed with a mean of 120 pounds and a standard deviation of 34 pounds. Lead time is 14 days.

-If Ned wants a service level of 67%, what is the reorder point? (Note: Use two decimal place z-value.)

D. Ned's chain of natural food stores sells shelled peanuts by the pound. Historically, Ned has observed daily demand is normally distributed with a mean of 295 pounds and a standard deviation of 31 pounds. Lead time is 13 days.

-If Ned can tolerate a 23% probability of stockout, what is the reorder point? (Note: Use two decimal place z-value.)

E. A Las Vegas supermarket bakery must decide how many wedding cakes to prepare for the upcoming weekend. Cakes cost $33.20 each to make and they sell for $47.38 each. The price of unsold cakes is reduced to $15.78 on Mondays.

-What is the optimal probability of having enough wedding cakes on the weekend?

Reference no: EM132174340

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