Problem:
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week. The new manager desires a service level of 90 percent. Lead time is 2 days, and the dairy is open seven times a week. (work in terms of weeks)
Using the ROP model, there are 8.39 gallons to be consistent with the SL level....
A) If a fixed interval model is used instead of ROP, and the order size is 34 gallons, 90 percent SL, and order interval of 10 days and a supply of 8 gallons on hand, what is the probability of experiencing a stockout before this order arrives?
B) Suppose the manager is using the ROP MODEL, One day after placing an order with the supplier, the manager receives a call from the supplier that the order will be delayed . The supplier promises to have the order there in 2 days. The manager checks the supply and finds that 2 gallons have been sold since the order was placed. What is the probability that the dairy will run out of the supply before the shipment arrives?