Question: ( 1 0 points ) A small Coca - Cola factory servicing Georgia Tech must decide how much Coke Zero to produce each day. The
points A small CocaCola factory servicing Georgia Tech must decide how much Coke Zero to produce each day. The cost of producing Coke Zero includes a $ fixed cost associated with changing production lines, as well as a unit cost of $ per liter of Coke Zero produced. Demand is modeled fairly accurately using a triangular distribution with the following pdf
Since CocaCola cares deeply about its loyal customerbase, the cont of unmet demand is estimated at $ per liter. The cost of storing any leftover Coke Zero is $ per liter. Answer the following questions.
a point What is the value of
b point Derive the CDF of this distribution.
c points What is the optimal volume of Coke Zero to produce?
d points Suppose that we have liters of Coke Zero leftover from the day before. If we do not produce any additional Coke Zero, what is the expected cost?
e points Suppose that we have liters of Coke Zero leftover from the day before. If we produce an additional liters of Coke Zero, what is the expected cost?
f points Suppose that we have liters of Coke Zero leftover from the day before. What is optimal amount of Coke Zero to produce if we want to minimize the expected cost?
points In one of our inclass activities, many students guessed that the optimal number of newspapers to order might be equal to the mean demand. After having solved many newsvendors problems, when would you expect that the optimal order quantity is "close" to the mean demand and when might it be very different from the mean demand?
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