Ethan's dog, Max, every day eats on average 2 pounds of kibble with a standard deviation of 0.25 pounds. Ethan buys the kibble from an online retailer that charges $2 per pound of kibble. The retailer has a delivery fee of $10 per order, regardless of how much dog food is ordered and consistently delivers in 2 days. Living in a small house Ethan does not have too much storage space, so he estimates that keeping a pound of kibble in the cabinet essentially costs him $0.1 per week. Max the dog, or course, does not pay for food. The retailer has two different sizes for kibble: 60-pound bags and 90-pound bags. If he runs out, he needs to replace the missing kibble with an equal amount of wet food which costs more, at $6 per pound. Note that Z.0.75 = 0.67, Z.0.67 = 0.43, Z.0.33 = -.43 and there are 365 days per year. 

a) Ethan needs to know when to place an order for kibble. At what level is the kibble (in pounds) when Ethan needs to place an order? How much safety stock should Ethan target? ROP = 4.15 lbs SS = 0.15 pounds 

Answer rating: 100% (QA)

To determine when Ethan needs to place an order for kibble and the safety stock he shoul... View the full answer