Answered: . Skinner’s Fish Market buys fresh…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 19P

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. Skinner’s Fish Market buys fresh Boston bluefish daily for $4.20 per pound and sells it for $5.70
per pound. At the end of each business day, any remaining bluefish is sold to a producer of cat
food for $2.40 per pound. Daily demand can be approximated by a normal distribution with a
mean of 80 pounds and a standard deviation of 10 pounds. What is the optimal stocking level?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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