(Answered) Double a stocks decorative coffee mugs that have been a big

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Double A stocks decorative coffee mugs that have been a big hit with the patrons. Each mug costs $3.00 and sells for $8.00. The cost of placing an order is $50.00, and once an order is placed, the mugs arrive in two weeks. During the two-week period, demand is normally distributed with a mean of 50 mugs and a standard deviation of 10 mugs. The cost of holding a mug in inventory is $.15/dollar value per year. If an item is out of stock, they will place the item on backorder and estimate that the cost of lost goodwill is $.20. Find the optimal ordering policy for Double A.

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