Organic milk is stocked at a grocery store each week. At the end of each week,...

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Organic milk is stocked at a grocery store each week. At the end of each week, unsold organic milk price is reduced by 25% and the store can sell the unsold organic milk fully at this lower price. If weekly demand for organic milk is normally distributed with a mean of 200 gallons and standard deviation of 20 gallons, find the price for which a fresh gallon of organic milk sells. Assume that the store has a service level of 95% and purchases organic milk for $6.1 per gallon. Bonus Problem: (6 points) (Bonus points will be added to your homework score). A fish distributor is trying to perfect his business to maximize the money he saves. Daily fish sales are normally distributed with a mean of 350 pounds and standard deviation of 60 pounds. The distributor sells each pound of fish for $6.00 and pays $2.50 per pound to buy fish. The distributor must get rid of unsold fish by paying a waste removal facility fee of $0.25 per pound of fish. How many pounds of fish should the distributor order each day and what % of the time will he experience a stock-out? Are there any drawbacks to the order size proposed and how could the fisherman address such issues? Organic milk is stocked at a grocery store each week. At the end of each week, unsold organic milk price is reduced by 25% and the store can sell the unsold organic milk fully at this lower price. If weekly demand for organic milk is normally distributed with a mean of 200 gallons and standard deviation of 20 gallons, find the price for which a fresh gallon of organic milk sells. Assume that the store has a service level of 95% and purchases organic milk for $6.1 per gallon. Bonus Problem: (6 points) (Bonus points will be added to your homework score). A fish distributor is trying to perfect his business to maximize the money he saves. Daily fish sales are normally distributed with a mean of 350 pounds and standard deviation of 60 pounds. The distributor sells each pound of fish for $6.00 and pays $2.50 per pound to buy fish. The distributor must get rid of unsold fish by paying a waste removal facility fee of $0.25 per pound of fish. How many pounds of fish should the distributor order each day and what % of the time will he experience a stock-out? Are there any drawbacks to the order size proposed and how could the fisherman address such issues?

Answer rating: 100% (QA)

To find the price for which a fresh gallon of organic milk sells we can use the concept of service level and safety stock Given Mean demand 200 gallon... View the full answer