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Introduction to Supply Chain Management

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Single-Period Inventory System

A local sub shop across town makes sandwiches every morning to sell to U.S. Cellular store employees and customers at lunch time. Sandwiches are sold for $6.25 and cost $4.25 to make and deliver to customers. It costs the sub shop $0.25 per sandwich to pick up any leftover sandwiches after lunch time, but these leftovers can be sold for $4.00 per sandwich. The average daily demand is 52 sandwiches with a standard deviation of 21 sandwiches.

What is the target service level?

How many sub sandwiches should be made each day to meet this service level?

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Operation Management, Management Studies

Category:- Operation Management
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