The distribution of daily demand for rug-cleaning machines at a rental store is shown in the following

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The distribution of daily demand for rug-cleaning machines at a rental store is shown in the following table. Machines are rented by the day only. Profit on a rug cleaner is $10 per day. The store has four rug-cleaning machines.

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a. Assuming that the stocking decision is optimal, what is the implied range of excess cost per machine per day?
b. Your answer from part a has been presented to the manager, who protests that the amount is too low. Does this suggest an increase or a decrease in the number of rug machines he stocks? Explain.
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Operations Management

ISBN: 978-0071091428

4th Canadian edition

Authors: William J Stevenson, Mehran Hojati

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