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Q. A dairy product is ordered daily at a particular supermarket. product, which costs $1.19 per unit, sells for $1.65 per unit. If units are unsold at end of day, supplier takes m back at a rebate of $1 per unit. Assume which daily demand is approximately normally distributed with a mean of 150 also a standard deviation of 30.
a) Illustrate what is your recommended daily order quantity for supermarket?
b) Illustrate what is probability which supermarket will sell all units it orders?
c) In problems such as these, why would supplier offer a rebate as high as$1? For example, why not offer a nominal rebate of, say 25 cents per unit? Illustrate what happens to supermarket order quantity as rebate is reduced?
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