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?

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Definitions:

Rules-Based Dispatching

Rules-Based Dispatching involves utilizing predetermined rules to govern the allocation and scheduling of work or tasks, often to optimize productivity and resource use.

Product Mix

Product mix represents the total variety of products that a company offers for sale, encompassing different product lines, sizes, colors, and other variations.

Job Flow Time

The total time taken from the initiation to the completion of a job, including processing, waiting, and transportation times.

Dispatching Rules

Guidelines used in production control to determine the priority in which jobs should be processed on manufacturing resources.