Answered: Big Poppy's Pizza uses a periodic…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Big Poppy's Pizza uses a periodic review system to manage the inventory of key items delivered from the distribution center once per week. The demand for boxes during the reorder period and order lead time is normally distributed with an average of 623 and the standard deviation of 66.7. If the store wants to maintain a 99% service level where should they set the restocking level. Round your answer to the nearest whole number.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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