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Chapter 4: Q. 10OQ (a) (page 545)

You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day鈥檚 paper for \(0.25 a copy. You sell a copy of the San Pedro Times for \)1.00. Daily demand is distributed normally with mean=250 and standard deviation =50. At the end of each morning, any leftover copies are worthless and they go to a recycle bin.

a. How many copies of the San Pedro Times should you buy each morning

Short Answer

Expert verified

The standard deviation is a statistic that computes the root of the variance and indicates the dispersion of a dataset compared to its mean. The quality deviation is determined as the root of the variance by computing the departure of each datum from the mean.

Step by step solution

01

Calculations of Service level

Service level =CuCu+C0=0.750.75 + 0.25= 0.75= 75%

02

Calculation of z value by using the spreadsheet =NORMSINV() function

Given,

Z = 0.67

Mean = 250

Standard deviation= 50

Calculation of total number of copies of Sam Pedro to be bought

=Mean+z蟽=250+0.67脳50=283.7 or 284

So, the total number of copies that Sam Pedro will buy is 284.

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Most popular questions from this chapter

Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:

Month

Demand (units)

January

4200

February

4300

March

4000

April

4400

May

5000

June

4700

July

5300

August

4900

September

5400

October

5700

November

6300

December

6000

  1. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 18.8. Compare your results to those obtained by using the forecast spreadsheet function.
  2. To be reasonably confident of meeting demand, Nina decides to use three standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?

Question: The following tabulations are actual sales of units for six months and a starting forecast in January.


 ACTUAL
 FORECAST
January
 100
 80
February
 94

March
 106

April
 80

May
 68

June
 94

a. Calculate forecasts for the remaining five months using simple exponential smoothing with 伪= 0.2.

b. Calculate MAD for the forecasts.

University Drug Pharmaceuticals orders its antibiotics every two weeks (14 days) when a salesperson visits from one of the pharmaceutical companies. Tetracycline is one of its most prescribed antibiotics, with an average daily demand of 2,000 capsules. The standard deviation of daily demand was derived from examining prescriptions filled over the past three months and was found to be 800 capsules. It takes five days for the order to arrive. University Drug would like to satisfy 99 percent of the prescriptions. The salesperson just arrived, and there are currently 25,000 capsules in stock. How many capsules should be ordered?

Question: Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates.

Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:

Month

Demand (units)

January

4200

February

4300

March

4000

April

4400

May

5000

June

4700

July

5300

August

4900

September

5400

October

5700

November

6300

December

6000

b. To be reasonably confident of meeting demand, Nina decides to use three standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?
See all solutions

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