Reconsider Prob. 18.7-5. The bakery owner, Ken Swanson, now has developed a new plan to decrease the
Question:
(a) to (d) of Prob. 18.7-5], write a formula for how many loaves should be produced in the second baking in terms of a and b.
(b) What is the probability of still incurring a shortage of fresh bread on any given day? How should this answer compare to the corresponding probability in Prob. 18.7-5?
(c) When b a = 75, what is the maximum size of a shortage that can occur? What is the maximum number of loaves of fresh bread that will not be sold? How do these answers compare to the corresponding numbers for the situation in Prob. 18.7-5 where only one (early morning) baking occurs per day?
(d) Now consider just the cost of underordering and the cost of overordering. Given your answers in part (c), how should the expected total daily cost of underordering and overordering for this new plan compare with that for the situation in Prob. 18.7-5? What does this say in general about the value of obtaining as much information as possible about what the demand will be before placing the final order for a perishable product?
(e) Repeat parts (a), (b), and (c) when including the cost of the loss of customer goodwill as in part (e) of Prob. 18.7-5.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Fantastic news! We've located the answer you've been seeking!
Step by Step Answer:
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
Question Posted: