Find the optimal service level

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Reference no: EM13970484

Matthew is in the newspaper business. He needs to decide how many papers to order the night before and receives papers early morning everyday.. Every newspaper coosts him $1.10 to order but will generate $2.00 in revenue. Any unsold newspapers at the end of the day can be returned to the publisher for .20 cents salvage value. Find the optimal service level. Also, if mean daily sales is 100 papers and Standard deviation of daily sales is 20 papers normally distrusted, how many should he order tomorrow?

Reference no: EM13970484

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