hw2 - ORIE 4580/5580/5581 Homework Assignment 2 Due by Sep....

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ORIE 4580/5580/5581 Homework Assignment 2 Due by Sep. 16, 11:00 am, in the drop-box located on the second floor of Rhodes Hall. 1. a) A company selling oil operates a storage tank to serve 20 customer locations dispersed around the country. The monthly demand at each customer location is normally distributed with mean 60 million gallons and standard deviation 20 million gallons. The demands at different customer locations are independent of each other. The oil in the tank is replenished at the beginning of the month, and replenishment during the month is not possible. The company’s goal is to cover all customer demand in a month at least 95% of the time. Compute the minimum amount of oil that should be stocked in the tank at the beginning of each month, such that the company will be able to accomplish this goal. b) In order to reduce its transportation costs, the company now considers operating two storage tanks. The first tank will be assigned to 15 customer locations and the second tank will be assigned to the remaining 5 customer locations. The demand at a customer location
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hw2 - ORIE 4580/5580/5581 Homework Assignment 2 Due by Sep....

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