Score: 0 of 1 pt 110117(13complete) ? HW Score: 70.59%, 12 of 17 pts Problem 12.

Question

Score: 0 of 1 pt 110117(13complete) ? HW Score: 70.59%, 12 of 17 pts Problem 12.51 Question Heip Cynthia Knott's oyster bar buys fresh Louisiana oysters for $5 per pound and sels them for $9 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $3 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 120 pounds and a standard deviation of 16 pounds. How many pounds should she order each day? Refer to the standard normal table for z-values Cynthia should order pounds of oysters each day (round your response to one decimal place)

Explanation / Answer

Cu=$9-$5=$4

Co=$5-$3=$2

P= Cu/(Cu+Co) =4/(4+2) =0.67

For a Service level =0.67, z value =0.44

Q=120+16*0.44=127.04

So the answer is 127 pounds

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