Joes coffee shop has fresh doughnuts delivered each morning, Operation Management

Joes coffee shop has fresh doughnuts delivered each morning

Joe's Coffee Shop has fresh doughnuts delivered each morning. Daily demand for donuts is approximately normal with a mean of 12 dozen and a standard deviation of 2 dozen. Joe has estimated that if he runs short, it costs him $2.40 per dozen doughnuts, and if he has extra donuts left over it costs him it costs him $1.20 per dozen. What is the optimal service level for Joe?

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Operation Management: Joes coffee shop has fresh doughnuts delivered each morning

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