Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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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)).
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Transcribed Image Text: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)).
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