Demand for jelly doughnuts on Saturdays at Don\'s Doughnut Shoppe is shown in th
ID: 329721 • Letter: D
Question
Demand for jelly doughnuts on Saturdays at Don's Doughnut Shoppe is shown in the following table. elative 10 10 .02 (dozens)Frequency (dozens) Freq 19 20 21 01 05 12 .18 -13 .14 25 26 27 28 29 23 24 Determine the optimal number of doughnuts, in dozens, to stock if labor, materials, and overhead are estimated to be $2.85 per dozen, doughnuts are sold for $4.80 per dozen, and leftover doughnuts at the end of each day are sold the next day at half price. (Round your answer to the nearest whole number.) a-1. Optimal number of doughnuts a-2. What is the resulting service level? (Round your answer to 2 decimal places.) Service levelExplanation / Answer
Cs= Revenue –Cost = $4.8- $2.85=$1.95
Ce=Cost – Salvage = $2.85- ($4.8/2) =$0.45
Service Level= Cs/ (Cs+Ce) = 1.95 /(1.95+0.45) =0.8125
Demand
Frequency
Cumulative frequency
19
0.01
0.01
20
0.05
0.06
21
0.12
0.18
22
0.18
0.36
23
0.13
0.49
24
0.14
0.63
25
0.1
0.73
26
0.11
0.84
27
0.1
0.94
28
0.04
0.98
29
0.02
1
As the determined service level falls between the cumulative frequencies of 0.73 ( x= 25) and 0.84 (x=26) This indicates that 26 doughnuts should be stocked.
So answers are:-
The optimal number of doughnuts =26
Service level = 0.81
Demand
Frequency
Cumulative frequency
19
0.01
0.01
20
0.05
0.06
21
0.12
0.18
22
0.18
0.36
23
0.13
0.49
24
0.14
0.63
25
0.1
0.73
26
0.11
0.84
27
0.1
0.94
28
0.04
0.98
29
0.02
1
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