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Joe s Slop House is a little hole in the wall restaurant that serves slow - cooked barbecue beef sandwiches. The beef for the sandwiches
Joes Slop House is a little hole in the wall restaurant that serves slowcooked barbecue beef sandwiches. The beef for the sandwiches cooks overnight, so each evening Joe decides how much beef to cook for the next day. The beef costs $ a pound and Joe sells each sandwich filled with pound of beef for $ At the end of the day, any leftover beef is given to the neighborhood church for their soup kitchen. The tax deduction for this is worth $ a pound. Daily demand for the beef can be approximated by a normal distribution with a mean of pounds and a standard deviation of pounds.
Cost of Shortage Cs:
Cost of Excess Ce:
What is the optimal service level?
What is the corresponding z value?
How many pounds of beef should Joe cook for the next day?
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