Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 35 gallons per week and a standard deviation of 8:48 gallons per week. The new manager desires a service level of 94 percent. The Sweet Cream Dairy is open 7 days a week and 52 weeks a year. 1. If the ordering cost S = 200 per order and it is optimal for the Sweet Cream Dairy to order 400 gallons each time, then what is the per unit inventory holding cost H? 2. If lead time is 4 days, what reorder point should be used? If lead time follows a normal distribution with mean 4:6 days and standard deviation L days and the reorder point should be set to 36:5 gallons, 3. then what is the value of L?

Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 35 gallons per week and a standard deviation of 8:48 gallons per week. The new manager desires a service level of 94 percent. The Sweet Cream Dairy is open 7 days a week and 52 weeks a year. 1. If the ordering cost S = 200 per order and it is optimal for the Sweet Cream Dairy to order 400 gallons each time, then what is the per unit inventory holding cost H? 2. If lead time is 4 days, what reorder point should be used? If lead time follows a normal distribution with mean 4:6 days and standard deviation L days and the reorder point should be set to 36:5 gallons, 3. then what is the value of L?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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