Consider a buyer at bloomingdale''s responsible for purchase

Assignment Help Management Theories
Reference no: EM13487545

Question 1: Consider a buyer at Bloomingdale's responsible for purchasing dinnerware with Christmas patterns. The dinnerware only sells over the Christmas season and the buyer places an order for delivery in early November. Each dinnerware set cost $100 and sells for a retail price of $250. Any sets unsold by Christmas are heavily discounted in the post-Christmas sales and sold for a salvage value of $80. The buyer has estimated that demand is normally distributed with a mean of µ=350. Historically, forecast errors have had a standard deviation of s =150. The buyer has decided to conduct additional market research to get a better forecast. Evaluate the impact of improved forecast accuracy on profitability as the buyer reduces s from 150 to 0. Question 2: A large fraction of Benetton's sales are from knit garments in solid colors. Starting with thread, there are two steps to completing the garment - dying and knitting. Traditionally, thread was dyed and then the garment was knitted (Option 1). Benetton, however, has developed a procedure where dying was postponed until after the garment was knitted (Option 2). Benetton sells each garment at a retail price p=$50. Option 1 results in a manufacturing cost of $20, whereas option 2 results in a manufacturing cost of $22 per garment. Benetton disposes of any unsold garments at the end of the season in a clearance for $10 each. The knitting or manufacturing process takes a total of 20 weeks. Assume now that Benetton sells garments in four colors. Twenty weeks in advance, Benetton forecasts demand for each color to be normally distributed with a mean of µ=1000 and a standard deviation of s =500. Demand for each color is independent. With Option 1, Benetton makes the buying decision for each color 20 weeks before the sale period and holds separate inventories for each color. With Option 2, Benetton only forecasts the aggregate uncolored thread to purchase 20 weeks in advance. The inventory held is based on the aggregate demand across all four colors; they decide the quantity for individual colors after demand is known. a) Evaluate the profitability of both Options for Benetton. b) Assume now that demand for red sweaters at Benetton is forecast to be normally distributed with a mean µred=1000 and a standard deviation of sred =800. Demand for the other three colors is forecast to be normally distributed with a mean µ =300 and a standard deviation of s =200. Evaluate the profitability of both Options for Benetton, and explain how and why the results differ from those obtained in part a). Would it be possible to tailor Option 2 to better take advantage of postponement under this scenario? If so, briefly explain, how (qualitatively) 

Reference no: EM13487545

Role of stakeholders in quality and risk management

Discuss the role of stakeholders in quality and risk management including the relationships between employers and third party payers with health care organizations. What ro

How does the eu function

How does the EU function? Identify and describe its organization and operation.- What is the purpose of the following economic alliances: the Andean Community, Mercosur, and A

Conceptualise the state of environmental planning

Analyse the information presented and conceptualise the state of environmental planning in Australia. Analyse the relationship between urban form, community attitudes to na

Could the esc use given case as a precedent

Could the ESC use this case as a precedent that would permit it to seize private land in the developed countries and then pass the rights and the possession of that land ove

Explain how a lean production system functions

You should identify and describe the types of waste that a lean production system seeks to eliminate. There are seven categories or types of muds or waste (Ohno, 1998): Over

A distribution curve of new products on the market

Compile a list of 100 new products. If you are building a portfolio (EXTRA CREDIT at the end of the semester) of ads (see the Application Exercise in Chapter 6), you can g

Usually lead to significant market power

1. Why is it unlikely that copyright protection would usually lead to significant market power? 2. Explain why a monopolist who leases does not engage in planned obsolescence.

How well does toyota capitalize on strengths to meet threats

How would you describe the relationship between Gulfstream's "just in time" manufacturing and its strategic decision to locate its major facilities in SaExplain how these st

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