3. A restaurant uses an average of 8 jars of a special sauce every day. When...

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3. A restaurant uses an average of 8 jars of a special sauce every day. When they place an order, the jars arrive to the restaurant in a day (lead time is 1 day). Daily usage of sauce has a standard deviation of 3 jars. They think their demand during the lead time can be modelled with normal distribution. The manager is willing to accept no more than a 10 percent risk of stockout during lead time which is two weeks. Assume the distribution of the usage is normal and calculate at which level of inventory a new order needs to be placed (i.e. calculate the reorder-point(ROP)). (25 points) 3. A restaurant uses an average of 8 jars of a special sauce every day. When they place an order, the jars arrive to the restaurant in a day (lead time is 1 day). Daily usage of sauce has a standard deviation of 3 jars. They think their demand during the lead time can be modelled with normal distribution. The manager is willing to accept no more than a 10 percent risk of stockout during lead time which is two weeks. Assume the distribution of the usage is normal and calculate at which level of inventory a new order needs to be placed (i.e. calculate the reorder-point(ROP)). (25 points)

Answer rating: 100% (QA)

To calculate the reorder point ROP for the restaurants special sauce we need to consider the average ... View the full answer