Demand for gallons of milk (a perishable item)is normally distributed with a weekly mean of 50 and standard deviation of 15.How many additional gallons of milk must be stocked to increase the service level from 50% to 80%?
Consider a local club selling Christmas trees.If demand is normal with a mean of 200 and a standard deviation of 50,how many trees should the club stock if service level must be greater than 95%?
Milk is stocked at the grocery store each week.At the end of the week unsold milk is reduced in price by 70% and always sells for this lower price instantly.If weekly demand for milk is normally distributed with a mean of 200 gallons and standard deviation of 25 gallons,find the price for which a fresh gallon of milk sells.Assume a service level of 95% and that the store purchases milk for $2 per gallon.
A newspaper boy is trying to perfect his business in order to maximize the money he can save for a new car.Daily paper sales are normally distributed,with a mean of 100 and standard deviation of 10.He sells papers for $0.50 and pays $0.30 for them.Unsold papers are trashed with no salvage value.How many papers should he order each day and what % of the time will he experience a stockout? Are there any drawbacks to the order size proposed and how could the boy address such issues?