Question: Answer Questions 14-15 based on the new information, given below. Everything about Foxie Ow's Besty Bagel shop still holds, except her demand distribution. Foxie still


Answer Questions 14-15 based on the new information, given below. Everything about Foxie Ow's Besty Bagel shop still holds, except her demand distribution. Foxie still makes fresh bagels every day for selling on that day and wants to know exactly how much should she spend on making bagels so that she can earn the most profit. All of the following previously stated information still hold true. - Fresh bagels could be sold at $4 each when there is enough demand. - Day-old bagels are sold at $1.50 each at the end of the day when there is not enough regular demand. - Raw materials for each bagel is estimated at $2.50. - To make all customers happy. Foxie Owl gives a 25 cent discount coupon to each customer when she's out of bagels, to be used the next time the customer comes back. Historically, the coupon use rate has been 100%; therefore. Foxie essentially pays out 25 cents for each customer with unmet demand However. Foxie did some more sophisticated analysis over the past month and came back with the following demand numbers: - Her daily demand was normally distributed, with a mean of 150, and a standard deviation of 15. Note that the critical ratio does not change based on the demand distribution. You can verify that the cost of under-stocking (Cu) and the cost of over-stocking (Co) have not changed from the discrete demand distribution case. We know that in order to maximize profit, Foxie should set her target service level equal to the critical ratio. Because we are dealing with the normal distribution, the service level is related to the z-value. What is the most appropriate z-value for Foxie? Choose the closest number. \begin{tabular}{r|} \hline-0.35 \\ \hline 0.25 \\ \hline 0.25 \\ \hline 0.35 \\ \hline \end{tabular} Choose the number closest to your calculated value. 145 150 155 175
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