Newsvendor Problem Set

# F

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Unformatted text preview: the expected leftover? d. Suppose PolyMere purchases 300 gallons of raw material. What will be the fill rate? e. What will be the expected profit? f. Suppose PolyMere wants to ensure that there is a 92% probability that they will be able to satisfy the customer’s entire demand. How many gallons of the raw material should they purchase? g. Suppose PolyMere wants to ensure that they satisfy 95% fill rate. How many gallons of the raw material should they purchase? h. Assume that PolyMere sources from several suppliers that charge \$5, \$10, and \$15 depending on the region. Cost Target service level z ‐ value Q* \$5 \$10 \$15 Use the table above to: i. Compute the target service level for each cost level; j. Find z value corresponding to this service level for each cost level; k. How many gallons should Po...
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## This document was uploaded on 04/03/2014.

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