February 27, 2017

Homework Help: Operations Management

Posted by Clarissa on Saturday, July 21, 2012 at 11:29pm.

A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh strawberries can be reasonably approximated using normal distribution with a mean of 40 quarts per day and a standard deviation of 6 quarts per day. Excess costs run 35 cents per quart. The grocery orders 49 quarts per day.

a)What is the implied cost of shortage per quart?
b)Why might this be reasonable figure?

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