Introduction to Supply Chain Management
For all the problems, to receive full scores, you have to show your complete and accurate work. If you only provide the final answers without showing your computations, you will not be assigned a full score (or you will miss the opportunity of receiving partial credit).
Single-Period Inventory System
A local sub shop across town makes sandwiches every morning to sell to U.S. Cellular store employees and customers at lunch time. Sandwiches are sold for $6.25 and cost $4.25 to make and deliver to customers. It costs the sub shop $0.25 per sandwich to pick up any leftover sandwiches after lunch time, but these leftovers can be sold for $4.00 per sandwich. The average daily demand is 52 sandwiches with a standard deviation of 21 sandwiches.
What is the target service level?
How many sub sandwiches should be made each day to meet this service level?