Demand for Ice Cream at the Ouachita Dairy Can Be

question 73

Essay

Demand for ice cream at the Ouachita Dairy can be approximated by a normal distribution with a mean of 47 gallons per day and a standard deviation of 8 gallons per day.The new management desires a service level of 95%.Lead time is four days;the dairy is open seven days a week.What reorder point would be consistent with the desired service level?

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Definitions:

Challenging

Referring to a task or situation that is demanding and tests one's abilities or resources.

Optimal Level

The most favorable, effective, or desirable degree or quantity of something for achieving a specific outcome.

Individualizing Rewards

Tailoring reward systems to meet the specific needs, desires, or achievements of individual employees.

Expectancy Theory Component

Refers to elements of the expectancy theory of motivation, which suggests that individuals are motivated to act in a certain way based on their expectation that the act will be followed by a desired outcome.