Jasper's Grocery Places an Order for Monster Every 15 Days

question 10

Multiple Choice

Jasper's Grocery places an order for Monster every 15 days.Once the order is placed, delivery to the store typically occurs in 3 days.Average demand is 5 cases per day, and the standard deviation of demand is 1.5 cases per day.The store policy is to stock an amount of inventory that allows for an average stockout condition of 5 percent (1.65 standard deviations) while waiting for replenishment.It is time to place an order, and there are 20 cases on hand.How many units should be ordered?

• A)90 cases
• B)80 cases
• C)75 cases
• D)86 cases

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Definitions:

Roundabout Production

An economic concept that refers to more capital-intensive and indirect methods of production, which, although initially more time-consuming and costly, lead to greater efficiencies and outputs in the long run.

Capital Goods

Capital goods are physical assets that a business uses in the production process to manufacture products and services that consumers will later use.

Consumer Desire

The want for goods, services, or experiences that can provide satisfaction or utility to the consumer.

Profits of Industry

The total earnings of companies within a specific sector after subtracting costs and expenses.