A large national producer of canned foods plans to purchase 100 combines that are to be customized

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A large national producer of canned foods plans to purchase 100 combines that are to be customized for its needs. One of the parts used in the combine is a replaceable blade for harvesting corn. Spare blades can be purchased at the time the order is placed for

$100 each, but will cost $1,000 each if purchased at a later time because a special production run will be required.

It is estimated that the number of replacement blades required by a combine over its useful lifetime can be closely approximated by a normal distribution with mean 18 and standard deviation 5.2. The combine maker agrees to buy back unused blades for $20 each. How many spare blades should the company purchase with the combines?

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Production And Operations Analysis

ISBN: 9781478623069

7th Edition

Authors: Steven Nahmias, Tava Lennon Olsen

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