Answer:
c. >60
Explanation:
Given that:
Overage (CO) = 125
Shortage (CS) = 300
The Service level = [tex]\dfrac{CS}{CS+CO}[/tex]
[tex]=\dfrac{300}{300+125}[/tex]
[tex]=\dfrac{300}{425}[/tex]
= 0.7059
The Z value of 0.7059 is 0.55
where;
the mean [tex]\mu[/tex] = 60
the standard deviation [tex]\sigma[/tex]= 20
Optimal booking = [tex]\mu +(Z \times \sigma)[/tex]
Optimal booking = 60 + (0.55 × 20)
Optimal booking = 60 + 11
Optimal booking = 71