A Manager Is Reordering Lubricant When the Amount On-Hand Reaches

question 45

Essay

A manager is reordering lubricant when the amount on-hand reaches 422 pounds.Average daily usage is 45 pounds,which is normally distributed and has standard deviation of three pounds per day.Lead time is nine days.What is the risk of a stock-out?

---

Definitions:

Revenues

The complete sum of funds a company acquires from selling goods or delivering services over a specific time frame.

Unit Elasticity

A scenario in which the percentage change in quantity demanded or supplied is equal to the percentage change in price, resulting in no change in total revenue.

Total Spending

The aggregate amount of money spent by consumers, businesses, and the government in an economy over a specific period.

Inelastic

Characterizes a condition where a change in price leads to a relatively small change in the quantity demanded or supplied.