Compute order quantity that will maximize aspenwears profit

Assignment Help Operation Management
Reference no: EM13227430

AspenWear, a retailer of ski wear needs to place an order for the Mirabelle, a designer ski jacket for the high-end market.  The jacket retails for $600 and costs AspenWear $250 from a source in China.  Due to fickle customer tastes, any surplus jackets at the end of the ski season cannot be carried over to the next season but must be disposed of.  A bargain discounter has offered to buy these jackets at $150 each (and plans to mark them up to $300).  Also, because of the long lead times involved in sourcing from China, there is realistically only one opportunity to place an order during each season (in November of each year so that the jackets will be ready by the following August).   From past history, AspenWear believes that demand for the Mirabelle can be represented by a normal distribution with mean 6000 and standard deviation 3600.  Their current ordering rule is as follows: Order Quantity = Mean Demand + (1/3)*(Standard Deviation)

a. Compute the order quantity that will maximize AspenWear's expected profit.

b. Compare the two quantities (the one computed above plus the current rule) in terms of the following performance measures: expected sales, expected profit, expected overstock, and fill rate.

Reference no: EM13227430

Find the closest value

There are three equally likely states of nature (High, Medium, and Low demand). If the Build a large factory option will post profits of $90,000, $30,000, and - $30,000, respe

What conditions might abnormal results indicate

Select one of our body’s special senses (smell, taste, sight, or hearing) and identify at least one way that the function of this sense can be measured or assessed. What tests

Importance of spreading awareness of the? organization goal

Number of hours required per unit is 4 hours and there are 8 working hours per day. There are 20 working days in each month. How many units can 25 workers in a month without o

Successfully assert his disaffirmance of the contract

Belinda is a 17 year old college student. She enters into a written contract with Steve, an adult, for the purchase of Steve’s 1964 Corvette for $2,000. The performance of the

The product weight is normally distributed

In a cosmetics manufacturing company, the QA department measures the weight of the products after packaging. One particular product is supposed to weigh between 1 to 1.1 lbs.

Safety stock and expected annual shortage cost

Lee Camera stocks two items in its warehouse which it purchases from an outside supplier. Demand for the two items are independent; the inventory carrying percentage is 20% an

How many observations would be needed to estimate

How many observations would be needed to estimate the mean time for element C to within 0.10 minutes of its actual value with a confidence of 90percent? The following data w

Well seeded orchard-effectiveness of steve jobs leadership

Steve Jobs dropped out of college. And he was forced out of Apple less than a decade after starting it with Steve Wozaiak, having lost his fight to promote new Macintosh compu

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd