Author Question: A gourmet food store uses a one-week periodic review system for its supply of coffee beans. There is ... (Read 97 times)

sc00by25 · **on:** Jun 24, 2018

A gourmet food store uses a one-week periodic review system for its supply of coffee beans. There is a five-day lead time for orders, and the store will allow two stockouts per year.
a. What is the probability of a stockout associated with each replenishment decision?
b. What is the replenishment level if demand during the review and lead-time periods is normally distributed with mean 120 pounds and standard deviation 8 pounds?
c. How many pounds of beans should be ordered if there are 42 pounds of beans on hand?

Question 2

Assume that you have a binomial experiment with p = 0.4 and a sample size of 50 . The variance of this distribution is
a. 20
b. 12
c. 3.46
d. 2.83