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Problem 2: A perishable dairy product is ordered daily at a particular supermarket. The product, which costs $1.19 per unit, sells for $1.65 per unit.
Problem 2: A perishable dairy product is ordered daily at a particular supermarket. The product, which costs $1.19 per unit, sells for $1.65 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with mean of 150 units and a standard deviation of 30 units. a. What is your recommended daily order quantity for the supermarket? b. How likely the supermarket will experience a stock-out for this dairy product? c. In problems such as these, why would the supplier offer a rebate as high as $1 ? For example, why not offer a nominal rebate of, say, 25 cents per unit? What happens to the supermarket order quantity as the rebate is reduced
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