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A machine fills 750 ml bottles of whiskey with a measured amount of whiskey. The volume of whiskey in each bottle has a normal distribution with a known mean and standard deviation. By law, the contents of any product must be contained in 90% of the products sold. In this case, 90% of the 750 ml bottles of whiskey must contain at least 750 ml of whiskey. Assuming that the set point of the filling machine can be varied without changing the standard deviation of 6.0 ml, and that the cost of the whiskey at bottling time is $34 per liter, what is the annual cost of the whiskey to satisfy the 90% rule? Assume the bottling machine operates 24 hours per day for 180 days per year and that filling a bottle requires 2 seconds.

Operation Management, Management Studies

  • Category:- Operation Management
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