Suppose you are positioning "meals ready to eat" (MREs) for humanitarian aid, in an area prone to experiencing hurricanes.If a hurricane occurs, the number of MREs that might be demanded by affected residents of the area is normally distributed with a mean of 10,000 and a standard deviation of 500.MRE's cost $1 each to purchase and store.In the event of a hurricane, unused MREs are unlikely to be needed again before they spoil, in which case they must be disposed of at a cost of $0.25 per MRE.If during a hurricane there are not enough stored MREs to meet people's needs, then more MRE's can be purchased and quickly shipped in to the site at a cost of $8 each.How many MREs should you preposition in anticipation of a hurricane? (pick the number closest to the correct answer)

Question

Quizplus · Accepted Answer

The optimal number of MREs to preposition is determined by minimizing the expected cost, which includes the cost of purchasing, storing, and disposing of excess MREs, as well as the cost of emergency shipments. The critical ratio is calculated as 0.875, leading to a z-score of approximately 1.15. Using the mean and standard deviation, the optimal number of MREs is approximately 10,520.

Suppose You Are Positioning "Meals Ready to Eat" (MREs) for Humanitarian