A Gourmet Food Store Uses a One-Week Periodic Review System

question 10

Essay

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?

---

Definitions:

Routine Message

Standardized communications that convey regular, everyday information within or outside an organization.

Relevant Details

Information or facts closely related to the subject at hand, important for understanding or decision-making.

Main Idea

The primary or central concept being communicated in a document or conversation.

Routine Requests

Standard inquiries or appeals made in the course of regular business or daily life, often following established procedures.