Question
You work as a clerk at Bakery #246, a Malaysian bakery specialized in using tropical fruits in their pastries. The chef baker wants to introduce
You work as a clerk at Bakery #246, a Malaysian bakery specialized in using tropical fruits in their pastries. The chef baker wants to introduce a new pastry, durian cream puffs. Introducing this new pastry creates a new inventory problem for the bakery because durians have a strong smell and cannot be stored overnight in the fridge, lest they will ruin the taste of all the other food in the fridge. The durian cream would have to be ordered fresh daily.
Durian cream is purchased in pounds at RM 4.6 /lb (RM is the currency in Malaysia, and RM stands for Malaysian Ringgit). The chef predicts the demand will be 42 lbs of durian cream on average with a standard deviation of 3.36 lbs per day. You may assume that the demand is normally distributed. You estimate that each pound of durian cream will be sold at RM 12.88/lb.
How many pounds of durian cream should you order if you wish to maximize profitability?
What Cycle Service Level (CSL) does your answer correspond to?
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