Compute the projected profit for the order quantities

Assignment Help Basic Statistics
Reference no: EM13148663

Members of a management team suggestedorder quantities of 15,000, 18,000, 24,000, or 28,000 units. The wide range of order quantities suggested indicate considerabledisagreement concerning the market potential. the productmanagement team asks you for an analysis of the stock-outprobabilites for various order quantities, an estimate of theprofit potential, and to help make an order quantityrecommendation. Specialty (the company name) expects to sellWeather Teddy (the product) for $24 based on a cost of $16 perunit. If inventory remains after the holiday season, Specialty willsell all surplus inventory for $5 per unit. After reviewing thesales history of similiar products, Specialty's senior salesforecaster predicted an expected demand of 20,000 units with a 0.90probability that demand would be between 10,000 units and 30,000units.

1. Use the sales forecaster's rediciton to describe a normalprobability distribution that can be used to approximate the demanddistribution. Sketch the distribution and show its mean andstandard deviation.

2. Compute the probability of a stock-out for the order quantitiessuggested by members of the management team.

3. Compute the projected profit for the rder quantities suggestedby the management team under three scenarios: worst case in whichsales = 10,000 units, most likely case in which sales = 20,000units, and best case in which sales = 30,000 units.

4. One of Specialty's managers felt that the profit potential wasso great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is that projected profit under the three sales scenarios.

5. Provide your own recommendation for an order quantity and notethe associated profit projections. Provide a rationale for your recommendation.

Reference no: EM13148663

Confidence interval for the average amount of bonus dollars

The results are x‾ = $259.60 and s = $52.00. Give a 95% confidence interval for the average amount of bonus dollars that will be spent by a cardholder during the year.

Find an example from some recent experience

Find an example from some recent experience where anecdotal evidence is used to draw a conclusion that is not justified. Describe the example and explain why it cannot be us

Estimating election polling

An election coming up next week promises to be very close. In fact, assume that 50% are in favor and 50% are against. Suppose you conduct a poll of 791 randomly selected lik

Identifying a significant positive correlation

A researcher conducts some research in which they identify a significant positive correlation (r =0.42) between the number of children a person has and their life satisfacti

A criminal psychologist wants to examine the level of narcis

3. (SPSS) A criminal psychologist wants to examine the level of narcissistic personality traits between those who are diagnosed with antisocial personality disorder (ASPD

Two tailed test with critical walues

A researcher predicts that watching a film on institutionalization will change students' attitudes about chronically mentally ill patients.

Population in great smoky mountains national park

The American black bear (Ursus americanus) is one of eight bear species in the world. It is the smallest North American bear and the most common bear species on the planet.

Relationship exists between field size and number of seats

Before you run your scatter diagram answer the following: What do you think you will find? Bigger fields have more seats? Smaller fields have more seats? No relationship exist

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