Suppose that the manager of a

Suppose that the manager of a construction suupplyu house determined from historical records that demand for sand during lead time averages 60 tons.  In addition, suppose the manager determined that demand during lead time could be described by a normal distribution that has a meand of 75 tons and a standard deviation of 3 tons.  Answer the following questions, assuming that the maanger is willing to accept a stockout risk of no more than 2 percent.  


a.  What value of z is appropriate?

b.  How much safety stock should be held?

c.  What reorder point should be used?

Suppose that the manager of a

Suppose that the manager of a paint store wants to estimate the actual amount of paint contained in all 1- gallon cans of Acme Paint. She takes a random sample of 50 cans from the stockroom and finds the average amount of paint per can is .995 g with a S.D. of .02 g. Construct a 95% interval estimate for the true mean amount of paint in all 1-gal cans. Is it necessary to advise that an adjustment in the production process is needed?

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