uiz: Quiz 12 Time Remaining: 00:17:27 Submit Quiz iS Q uestion: 1 pt \'4- 7 of 7
ID: 377706 • Letter: U
Question
uiz: Quiz 12 Time Remaining: 00:17:27 Submit Quiz iS Q uestion: 1 pt '4- 7 of 7 (6 complete) bN This Quiz: 7 pts pos - Dynthia Knott's oyster bar buys fresh Louisiana oysters for s3 per pound and sells them for $8 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $2 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 120 pounds and a stan deviation of 17 pounds How many pounds should she order each day? Refer to the sta rd normal table for z-values inven Cynthia should order 136.5 pou ds of oysters each day (round your response to one decimal place) Standard Normal Table 0.031 0.04 -0.05 000 1 0.07 0.01 0.00-1-0.01]0.02 erage 0.2 05793 05832 0 5871 05910 0 5948 05987 0.6026 0.6064 0.610 06368 0.6406 0.6443 0648 0.1 05398 05438 05478 05517 0.5557 0.5596 0.5636 0.5675 0.57 7R6I0 6772 0.6808 0.684Explanation / Answer
Underage cost, Cu = 8-3 = 5
Overage cost, Co = 3-2 = 1
Critical service level F(z) = Cu/(Cu+Co) = 5/(5+1) = 0.833
Corresponding z-statistic = NORMSINV(0.833) = 0.9674
Optimal order quantity = + z = 120 + 0.9674*17 = 136.4 pounds
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