The Fish Market Restaurant serves premium Hammour fish to its customers. The demand for the fish is normally distributed, with an average 210 kilograms per week and a standard deviation 11.5 kilograms. The lead time to receive an order of the raw fish from the local supplier is normally distributed with a mean of 2 days and a standard deviation of 0.9 day. The restaurant operates 7 days a week.   a) Determine the re-order point if the restaurant wants to maintain a 90% service level. b) What would be the increase in the safety stock if a 95% service level is desired? c) The Manager of the Fish Market Restaurant has negotiated with the local supplier for the lead time to receive orders to be a constant 2 days. What effect does this have on the reorder point calculated in part (a) for a service level of 90%?

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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The Fish Market Restaurant serves premium Hammour fish to its customers. The demand for the fish is normally distributed, with an average 210 kilograms per week and a standard deviation 11.5 kilograms. The lead time to receive an order of the raw fish from the local supplier is normally distributed with a mean of 2 days and a standard deviation of 0.9 day. The restaurant operates 7 days a week.

 

a) Determine the re-order point if the restaurant wants to maintain a 90% service level.

b) What would be the increase in the safety stock if a 95% service level is desired?

c) The Manager of the Fish Market Restaurant has negotiated with the local supplier for the lead time to receive orders to be a constant 2 days. What effect does this have on the reorder point calculated in part (a) for a service level of 90%?

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