Answer :
Gyona if purchase meat from the local market at $ 5 per kilo then the order quantity is 103 kg. Option A is correct.
Purchase cost = $5
Selling Price = $9
Salvage value = $2
Mean demand, н = 100
Standard deviation, σ = 15
Cost of underage, Cu = Selling price - Purchase cost
= 9-5 = 4
Cost of overage, Co= Purchase cost - Salvage value
= 5-2 = 3
Service level = Cu/(Cu+Co)
= 4/(4+3)
= 4/7
= 0.5714285714
Z score for a service level of 0.5714285714
= NORM.S.INV(0.5714285714)
= 0.18
Optimal order quantity = н + z σ
= 100 + 0.18 × 15
= 102.7 ~ 103
An asset's estimated salvage value is its estimated value at the end of its useful life. It represents the price at which an organization might be able to sell an asset after it has been fully depreciated. In contrast, an asset's book value is the value as shown on a company's balance sheet.
The estimated value of an asset after its useful life has expired and it cannot be used for its original purpose is known as its salvage value or scrap value.
Learn more about Salvage value:
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Complete question as follows:
Gyona purchases meat from the local supermarket at $5 per kilo and sell it at $9 per kilo. any unsold meat: is sold to the Chinese restaurant near by at $2 per kilo. Gyona is sure that the demand follows a normal distribution with a mean of 100 kilograms and a standard deviation of 15 kilograms. 12) How many kilograms should she order each day?
A.103
B. 119
C. 225
D. 219
