A bakery buys sugar from a big distributor to use in baking cakes

  1. A bakery buys sugar from a big distributor to use in baking cakes. Typically, they use 24 pounds of sugar in a day. But depending on the day, they may use a little bit less or more. It is estimated that the standard deviation of demand for sugar is 4 lbs per day. It takes 9 days from the time the bakery orders sugar until the distributor delivers the sugar. The manager wants to have a service level of 0.92. Determine each of the following, assuming that demand is distributed normally.
  1. Z value for the intended service level?
  2. The safety stock that will provide the intended service level?
  3. The ROP that will provide the intended service level?

 

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