Question: Problem 10-27 (Algorithmic) A perishable dairy product is ordered daily at a particular supermarket. The product, which costs $1.23 per unit, sells for $1.74 per

Problem 10-27 (Algorithmic) A perishable dairy

Problem 10-27 (Algorithmic) A perishable dairy product is ordered daily at a particular supermarket. The product, which costs $1.23 per unit, sells for $1.74 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with u = 145 and o = 25. Note: Use Appendix B to identify the areas for the standard normal distribution. a. What is your recommended daily order quantity for the supermarket? Round your answer to the nearest whole number. = b. What is the probability that the supermarket will sell all the units it orders? Round your answer to three decimal places. P(Stockout) = 0.311 c. In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate of, say, 25 per unit? What happens to the supermarket order quantity as the rebate is reduced? The lower rebate decreases the quantity that the supermarket should order

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