Question

"Pacifico" is a US manufacturer of drilling machines. They have been focused for years in improving their manufacturing process, to improve quality management and reduce defects. Now that they have achieved their goal, they are starting to focus on the operations side.

They have realized that they usually stock out of the "Super Duper", a very sturdy drilling machine that can handle heavy-duty work.

After doing some analysis of past demand data, they came to the conclusion that the monthly demand for "Super Duper" machines follows a normal distribution of mean 460 and standard deviation 115.

A) With their current capacity, they are able to manufacture 300 "Super Duper" machines per month. With this production level, what is the probability of stocking out of "Super Duper" machines in a given month?

B)How many “Super Duper” machines should they manufacture to be able to fulfill at least 80% of the monthly demand?

Answer 1