Operations Management
Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Chapter A, Problem 12P

Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 6 cases is .1, for 7 cases it is .3, for 8 cases it is .5, and for 9 cases it is .1. The cost of every case is $45, and the price Susan gets for each case is $95. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. How many cases should Susan manufacture each month?

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Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY