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Question: George takes an eclectic mix of spices to make his authentic jerk seasoning as a rub for chicken, pork, and fah. The ingredients and packaging cost $1.50 and he sells the packets by the case to Jerk Stores in the Caribbean for S2.50 per packet. Tourists to the islands gladly pay $8.75 for these packets, eager to host their fiends for an authentic Caribbean meal and bore them with vacation photos upon their return. The demand for the packets is normally distributed, with a mean of 2500 packets and a standard deviation of 600.
(a) If each Jerk Store location is acting independently, how many packets of seasoning should they order? (b) If each Jerk Store location is acting independently, what is their expected overstock quantity if they order the optimal quantity? (c) If George and a single Jerk Store act as a vertically integrated supply chain, what is the optimal quantity for the Jerk Store to order?
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