Charlie\'s Pizza orders all of its pepperoni, olives, anchovies, and mozzarella
ID: 462624 • Letter: C
Question
Charlie's Pizza orders all of its pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every three weeks to take orders. Because the orders are shipped directly from Italy, they take two weeks to arrive. Charlie's Pizza uses an average of 190 pounds of pepperoni each week, with a standard deviation of 28 pounds. Charlie's prides itself on offering only the best-quality ingredients and a high level of service, so it wants to ensure a 90 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 460 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order? (Round your answer to the nearest whole number.) Amount of pepperoni's ordered pounds
Explanation / Answer
We assume that demand each week is a random variable and is normally distributed.
Average Consumption over 3 weeks = 190*3 = 570 pounds
Standard deviation over 3 weeks = 28*(sqrt(3)) = 48.497 pounds
Looking at the Z table for 90% probability, we have z = 1.282
Thus, (x - 570)/48.497 = 1.282 where x is the pounds of pepperoni to last 3 weeks
x = 632.173
AAmount of pepperoni ordered = 632 - 460 = 172 pounds