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?
Round your answer to two decimal places.
What Cycle Service Level (CSL) does your answer correspond to?
Answer as a percentage with two decimals.
With your suggested order quantity from Part 1, how many pounds of durian cream can you expect to be short on a regular day?
Round your answer to three decimal places.
What is the expected profit (in RM) with your suggested order quantity?
Round your answer to the nearest integer.
The current order quantity and cycle service level seems low. You wonder what the new order quantity would be if you increased the cycle service level to 95%.
How many pounds of durian cream should you order to have a cycle service level of 95%?
Round your answer to two decimal places.
With this order quantity, how many pounds of durian cream can you expect to be short on a regular day?
Round your answer to three decimal places.
What is the expected profit (in RM) with this order quantity?
Round your answer to the nearest integer.
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