Don washing is trying to determine how many gallons of


Don Washing is trying to determine how many gallons of lemonade to make each day. Don needs to consider a single-period system because whatever lemonade is left over at the end of the day must be thrown out due to health concerns. Every gallon he mixes costs him $2.50 but will generate $10 in revenue if sold. Don knows from past experience that daily demand follows a normal distribution. To further complicate things, Don also knows that the mean and standard deviation for demand differ by day of the week (Monday-Friday, ? = 422 ? = 67; Saturday, ? = 719 ? = 113; and Sunday, ? = 528 ? = 85). a. What is the service level and target stocking level for Monday-Friday? b. What is the service level and target stocking level for Saturday? c. What is the service level and target stocking level for Sunday?

 

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