e.edu/courses/30253/quizzes/41144/take/questions/3130456 Answers are to be enter

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e.edu/courses/30253/quizzes/41144/take/questions/3130456 Answers are to be entered into Canvas directly rather than uploaded as we did for Exam #1. Supporting pe uploaded via the comment feature when you submit your exam. Question 5 10 pts On average, the Donut Depot sells between 200 and 250 fresh donuts a day and demand is uniformly distributed. The cost to make a donut is $.25 and the fresh donuts sell for $1.00 each. Any donuts that are not sold on the first day, are sold for $.15 the next day a) What is the calculated service level that Donut Depot should operate at each day? b) How many donuts should the Donut Depot make each day in order to maximize profits? e t the company's and adjoining its bank (as trustee pany president. r inventory oncerning a ationale? 7 8 9 0 $10 each. er crate

Explanation / Answer

All prices aare in $

P price 1 C Cost 0.25 V salvage 0.15 Cu P-C 0.75 Co C-V 0.1 Critical ratio Cu/(Cu+Co) 0.882353 So for 88.24% service level Ans A So as per 88.24% the donuts required is 200 + 0.882353*(250-200) 244.11765 So 244 should be ordered Ans B

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