Let's say you are ordering food for your wedding reception, and you sent out 150 invitations....

 

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Let's say you are ordering food for your wedding reception, and you sent out 150 invitations. Everyone RSVP'd, with 140 people saying they would attend. You know however that not everyone who RSVP'd will actually show up; there are always, always, always some no-shows (at least from the question-writers experience). Thus you expect to need 100 meals. But just to be safe, you plan to order 110 meals, estimating this is a 90% service level (accepting a 10% probability you'll run out). You discuss this with your fiance who is adamant about increasing your service level to 99%. What is the cost of underage implied by your fiance? Assume that a meal costs $30 with salvage value of $5 (you have a large freezer and enjoy leftovers). $ 2500 $3 $ 3000 $ 300 Let's say you are ordering food for your wedding reception, and you sent out 150 invitations. Everyone RSVP'd, with 140 people saying they would attend. You know however that not everyone who RSVP'd will actually show up; there are always, always, always some no-shows (at least from the question-writers experience). Thus you expect to need 100 meals. But just to be safe, you plan to order 110 meals, estimating this is a 90% service level (accepting a 10% probability you'll run out). You discuss this with your fiance who is adamant about increasing your service level to 99%. What is the cost of underage implied by your fiance? Assume that a meal costs $30 with salvage value of $5 (you have a large freezer and enjoy leftovers). $ 2500 $3 $ 3000 $ 300

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