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salantis [7]
3 years ago
11

Daily demand for fresh cauliflower in the ZZ-Warehouse store follows normal distribution with mean 100 cartons and s.d. 20 carto

ns. The ZZ-Warehouse buys at a cost of $50.00 per carton, sells it for $70.00 per carton. Unsold cartons are sold for $20.00 per carton. What is the optimal order quantity, using the single period model?
Business
1 answer:
tamaranim1 [39]3 years ago
7 0

Answer: The optimal order quantity would be 95 approximately.

Explanation:

Since we have given that

Mean = 100 cartons

SD= 20 cartons

Cost price per carton = $50.00

Selling price per carton = $70.00

Salvage cost = $20.00

Underage cost = Selling  price - cost price

C_u = 70-50=20

Overall cost = Cost price - Salvage

C_o=50-20=30

So optimality proportion would be

\dfrac{C_u}{C_o+C_u}\\\\=\dfrac{20}{20+30}\\\\=\dfrac{20}{50}\\\\=0.4

At p = 0.4, so z = -0.253

So, it becomes,

q=\mu+z\times \sigma\\\\q=100-0.253\times 20\\\\q=100-5.06\\\\q=94.94

So, the optimal order quantity would be 95 approximately.

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Answer:

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Answer:

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Inadequately trained Employees is a major reason for Material Wastage. If employees are not trained by seasoned people who know how to reduce wastage, that knowledge could take time to come to them. If they were adequately trained however, they can master the tricks on wastage avoidance and limit discrepancies in the amount of materials used per comparable jobs.

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