Examlex

Solved

A Manager Reorders Lubricant When the Amount on Hand Reaches

question 148

Essay

A manager reorders lubricant when the amount on hand reaches 422 pounds. Average daily usage is 45 pounds, which is normally distributed with a standard deviation of three pounds per day. Lead time is nine days. What is the risk of a stockout?


Definitions:

Net Income

Profit calculated after deducting all operating expenses, interest, taxes, and any other charges from total revenues.

Service Firm

An enterprise offering non-physical products or services to its customers, as opposed to tangible items.

Merchandising Company

A business that purchases goods in finished form for resale to consumers, generating revenue through sales activities.

Retailer

A business or person that sells goods directly to consumers from a physical or online store.

Related Questions