Answered: Lumumba Carpet Discount Store sells…

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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Lumumba Carpet Discount Store sells Super Shag carpet. The average daily customer demand for the carpet stocked by the store is normally distributed, with a mean daily demand of 30 metres and a standard deviation of 5 metres of carpet per day. The lead time for receiving a new order of carpet is 10 days. Advice the the store if they desire a reorder point and safety stock for a service level of 95%, with the probability of a stockout equal to 5%.

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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