The local supermarket buys lettuce each day to ensure really fresh produce. Each

Question

The local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $6.00 a box. The lettuce is sold for $12.00 a box and the dealer that sells old lettuce is willing to pay $1.40 a box. Past history says that tomorrow's demand for lettuce averages 230 boxes with a standard deviation of 33 boxes.

How many boxes of lettuce should the supermarket purchase tomorrow? (Round your answer to the nearest whole number.)

How many boxes of lettuce should the supermarket purchase tomorrow? (Round your answer to the nearest whole number.)

Explanation / Answer

The profit from a box is 6 and the loss is 4.6

Hence the probability for a box to be unsold in order to breakeven is 6 / ( 6 + 4.6 ) = 0.566

So the P is 0.566

Hence Z is 0.1665

Hence

The quantity ordered is 230 + 0.1665 * 33 = 235.49 boxes or 235 boxes

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