Question: Problem 3 . A gourmet store sells a perishable delicacy fish, which is brought fresh daily from fishermen just prior to the start of the
Problem A gourmet store sells a perishable delicacy fish, which is brought fresh daily from fishermen just prior to the
start of the business day. Unsold fish must be disposed of at the end of the business day. One pound of fish costs the
store $ per pound, and sells for $ per pound. The store sells daily leftover fish to a cat food company at $ per
pound, but there is a transportation cost of $ per pound of unsold inventory. The store estimates that daily demand
follows a continuous uniform distribution between and pounds inclusive of fish per day, that is the probability of
any quantity of fish, between pounds and pounds is and the corresponding is
for in the same range.
Answer the following questions:
points Write down the model name and list all the parameters of the problem and their numerical values.
points What is the optimal quantity of fish rounded off to the nearest pound, if not integer the store should
stock each business day?
points If the daily demand actually has a normal distribution with mean and standard deviation what is
the optimal quantity of fish rounded off to the nearest pound the store should stock each business day?
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