Question
Road Grocers sells fresh produce which it obtain from local farmers. During the blueberry season, demand for fresh bluberries can be reasonably approximated by a
Road Grocers sells fresh produce which it obtain from local farmers. During the blueberry season, demand for fresh bluberries can be reasonably approximated by a normal distribution mean of 64 KG per day and a standard deviation of 6.28kg per day. During the day, blueberriesan only be delivered once a day in the morning. Any excess blueberry at the end of the day is salvaged and it turns out that an average cost of 72 cents per kg is incurred. Using the single per inventory control model the grocer finds out that the optimal order quantity is 71.50 kg per day
A.what is the implied shortage cost per kgjQuery22405985710389198045_1593180707294
B.Your answer from PartA has been presented to the store owner. She responds saying that the amount is too high and the actual unit shortage cost is far less. Does this suggest an increase or a decrease in the amount of strawberries that should be ordered every day ? Explain why
C.Independent of Part A and B If we assume that the marginal cost of being short is $2.4/Kg What should be the optimal order quantity?
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