(a) A shopkeeper has to decide how may loaves of bread he should stock every week. The...
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(a) A shopkeeper has to decide how may loaves of bread he should stock every week. The quantity of bread demanded in any week is assumed to be a continuous random variable, with a given probability function f (x). Let A be the unit cost of purchasing the bread, B the unit sale price, C the refund on unit sale of bread, and D the unit penalty cost. Find the optimum quantity of bread to be stocked.
(b) If A = 8, B = 20, C = 2 and D = 5, and the demand is regular between 1,000 and 2,000, show that the the optimum quantity is approximately 1,739 loaves of bread.
Related Book For
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
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