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Walnut Fudge Ice Cream Assignment

Author:
February 18th, 2020

3) Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons a week and a standard deviation of 3.5 gallons per week.

The new manager desires a service level of 92%. Carrying cost is $.50 per gallon. Lead time is exactly 1 week. A) What is the standard deviation of demand for the lead time? B) How much safety stock should be carried and what is the reorder point? C) If Q = 50, what does the total annual holding cost?

Z= 1.41

SS= 14.1

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