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Use Table 14.1. You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron, a spice
Use Table 14.1. You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron, a spice (generally) worth more by weight than gold. You order saffron from an overseas supplier with a shipping lead time of five weeks and you order weekly. Average weekly demand is normally distributed with a mean of 35 ounces and a standard deviation of 27 ounces. a. Suppose it uses an order-up-to level of 300 ounces. What is its expected on-hand inventory? Note: Use Table 14.1. Round your calculated z value to the nearest 0.1 increment. Round your answer to the nearest integer. b. Suppose it uses an order-up-to level of 300 ounces. What is its expected on-order inventory? Note: Round your answer to the nearest integer. c. Suppose it uses an order-up-to level of 369 ounces. What is its in-stock probability? Note: Use Table 14.1. Round your calculated z value to the nearest 0.1 increment. Round your answer to 4 decimal places. d. Suppose it wants a 0.95 in-stock probability. What should its order-up-to level be? Note: Use Table 14.1. Choose the z value with a cumulative probability AT LEAST as high as the required in-stock probability (e.g., if in-stock probability is 0.92 , use z=1.5 instead of z=1.4 ). Round your answer to the nearest integer
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