Determination of Safety Stock

Business & Finance, Management & Leadership, Management
Cover of the book Determination of Safety Stock by Homework Help Classof1, Classof1
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Author: Homework Help Classof1 ISBN: 1230000119324
Publisher: Classof1 Publication: April 3, 2013
Imprint: Language: English
Author: Homework Help Classof1
ISBN: 1230000119324
Publisher: Classof1
Publication: April 3, 2013
Imprint:
Language: English

"Jack then thinks - maybe my fuel usage isn't all that evenly spread out after all. Jack assigns probabilities to his fuel usage and determines that his expected shortage is 275 gallons and his expected excess is 300 gallons. Jack says it'll cost him another $0.40 per gallon to buy the fuel down the street if he runs out (i.e., stock out cost). How much safety stock should Jack maintain?
a. 6,150 gallons
b. 12,490 gallons
c. 1,480 gallons
d. 3,003 gallons
"

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"Jack then thinks - maybe my fuel usage isn't all that evenly spread out after all. Jack assigns probabilities to his fuel usage and determines that his expected shortage is 275 gallons and his expected excess is 300 gallons. Jack says it'll cost him another $0.40 per gallon to buy the fuel down the street if he runs out (i.e., stock out cost). How much safety stock should Jack maintain?
a. 6,150 gallons
b. 12,490 gallons
c. 1,480 gallons
d. 3,003 gallons
"

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