Single period model-what is the cost of underage

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Single Period Model

A company is considering ordering sunglasses for the up-coming season and can place only a single order. History indicates a demand averaging 400 with a standard deviation of 40, normally distributed. The glasses will sell for $120 each. They cost $80 each and the excess not sold will be sold out of the country for $20 each.

What is the cost of underage?

What is the cost of overage?

What is the desired service level?

What Z value is associated with the above service level?

What amount should be ordered?

Reference no: EM131118302

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Single period model-what is the cost of underage : A company is considering ordering sunglasses for the up-coming season and can place only a single order. History indicates a demand averaging 400 with a standard deviation of 40, normally distributed. What is the cost of underage? What is the cost of..

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