Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated b
ID: 377732 • Letter: D
Question
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.2 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.)
If an ROP model is used, what ROP would be consistent with the desired service level? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
How many days of supply are on hand at the ROP, assuming average demand? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.2 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.)
Use Table B and Table B1.Explanation / Answer
Demand distribution per day of the Walnut is: 3.2gallons/day and
standard deviation for this particular case =3.5/sqrt(7) of their Demand during lead time which has mean of 6 and also has a standard deviation = 3.5/sqrt(7)*sqrt(2) = sqrt(3.5) = 1.87
ROP for this process = norminv(0.9,6,1.87) = 8.4gallons
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