12. A restaurant uses an average of 8 jars of a special sauce every day. When they place an order, the jars arrive to the restaurant in a day (lead time is 1 day). Daily usage of sauce has a standard deviation of 3 jars. They think their demand during the lead time can be modelled with normal distribution. The manager is willing to accept no more than a 10 percent risk of stockout during lead time. Calculate at which level of inventory a new order needs to be placed (i.e. calculate the reorder-point(ROP)).

12. A restaurant uses an average of 8 jars of a special sauce every day. When they place an order, the jars arrive to the restaurant in a day (lead time is 1 day). Daily usage of sauce has a standard deviation of 3 jars. They think their demand during the lead time can be modelled with normal distribution. The manager is willing to accept no more than a 10 percent risk of stockout during lead time. Calculate at which level of inventory a new order needs to be placed (i.e. calculate the reorder-point(ROP)).

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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12.4 Demand for ice cream at the Ouachita Dairy can be approximated by a normal distribution with a mean of 47 gallons per day and a standard deviation of 8 gallons per day. The new management desires a service level of 95%. Lead time is four days; the dairy is open seven days a week. What reorder point would be consistent with the desired service level?
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