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Demand for vanilla ice cream at a small ice cream shop can be approximated by a Normal distribution with a mean of 2 5 litres
Demand for vanilla ice cream at a small ice cream shop can be approximated by a Normal distribution with a mean of litres per
week and a standard deviation of litres per week. The ice cream is purchased from an ice cream producer. The store manager
desires a lead time service level of percent. Lead time from the producer is two days. The store is open seven days a week. Refer:
table.
a If the EOQROP model is used for ordering the ice cream from the producer, what ROP would be consistent with the desired lead
time service level? Round the final answer to decimal places.
ROP
litres
b If a fixedinterval model is used instead, what order quantity should be used if the order interval is days and litres are on hand
and none are on order at the time of order? Do not round the intermediate calculations. Round the final answer to the nearest
whole number.
Quantity
litres
c Suppose that the manager is using the EOQROP model described in part One day after placing an order with the producer, the
manager receives a call from the producer saying that the order will be delayed because of problems at the producer's plant. The
producer promises to have the order there in two days. After hanging up the manager checks the inventory of vanilla ice cream and
finds that litres have been sold since the order was placed. Assuming that the producer's promise is valid, what is the probability that
the store will run out of vanilla ice cream before the shipment arrives? Round your intermediate calculations to decimal places and
the final answer to decimal places.
Probability
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