The studio is offering blockbuster deal

Assignment Help Operation Management
Reference no: EM13841683

A movie studio sells the latest movie on DVD to Blockbuster at $10 per DVD. The marginal production cost for the movie studio is $2 per DVD. Blockbuster prices each DVD at $25 to its customers. DVD s are kept on the regular rack for a one-month period, after which they are discounted down to $3. Blockbuster places a single order for DVDs. Their current forecast is that sales will be normally distributed, with a mean of 50,000 and a standard deviation of 30,000.

How many DVDs should Blockbuster order? What is its expected profit?

What is the profit that the studio makes given Blockbuster’s actions?

The studio is offering Blockbuster a deal: They will sell the DVD to blockbuster at $5 each in return for a 65-35 split of the revenue (65% to Blockbuster).Should Blockbuster agree to this deal?

Reference no: EM13841683

Questions Cloud

Developing project schedule-create more accurate schedule : When developing a project schedule, it is common to underestimate the time and budget needed for each milestone. What are some practices that could help a project manager to create a more accurate schedule?
What is the present value of that salvage value : ABC Company is considering an investment in a machine that will have a useful life of six years with a salvage value at the end of $12,000. Assuming that ABC has a minimum rate of return of 12%, what is the present value of that salvage value?
Which option will return the most to bill : Bill Martin made an investment several years ago, and he now has an option as to how it will take the return on that investment. Option 1 is to receive an immediate cash payment of $100,000. Option 3 is to receive a payment of $20,000 per year for th..
What is the machines internal rate of return : The Donut Shoppe is considering buying a new donut machine for a total of $110,110. The Donut Shoppe estimates that this new machine will increase its cash inflow each year, after expenses, by $22,000. This machine will have a useful life of 10 years..
The studio is offering blockbuster deal : A movie studio sells the latest movie on DVD to Blockbuster at $10 per DVD. The marginal production cost for the movie studio is $2 per DVD. Blockbuster prices each DVD at $25 to its customers. How many DVDs should Blockbuster order? The studio is of..
Order quantity-expected sales and expected overstock : AspenWear, a retailer of ski wear needs to place an order for the Mirabelle, a designer ski jacket for the high-end market. Compute the following performance measures for the above order quantity: expected sales, expected overstock, and expected prof..
What is the total safety stock across all stores : Suppose the 100 retail stores of a supermarket chain have identical weekly demand for a product (mean 200, standard deviation 120). There is zero correlation between the retailers’ demands. The lead time to replenish each retail store is 4 weeks. A c..
Which constraints are binding : Stoneware Pottery Company wants to determine how many bowls and mugs should be produced per day in order to maximize profit given the labor and material constraints. The unit profit value for Bowls is $40 per unit, for mugs the unit profit value is $..
Determine the speed range required to give a frequency range : Determine the speed range required to give a frequency range

Reviews

Write a Review

 

Operation Management Questions & Answers

  Use three philosophical theories to analyze

Provide one example of a sitution in which it seems to be more important for a business to be ethical than lawful, and one example of a situation in which it seems more important for a business to be lawful rather than ethical.

  How the sales manager facilitates long term relationships

Based on your synthesis of information from the text and elsewhere, describe and discuss how the sales manager facilitates long term relationships with customers.

  Vaginal delivery without complications

An HMO requests your hospital services for its obstetrics division. It offers to pay your hospital $2,000 for a vaginal delivery without complications (DRG 373). You look at the Standard Test Procedure (STP) for this Diagnosis-Related Group (DRG) and..

  State what kinds of conflicts between its stakeholder groups

Draw a stakeholder map that identifies your organization's major stakeholder groups. What kinds of conflicts between its stakeholder groups would you expect to occur the most

  What controls would be necessary to ensure only valid data

Sustainable Performance Phase - The Sustainable Performance Phase transfers the process from being project oriented to an organization driven process

  Comparing the two forecasts using mad

The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill,

  What does the future look like for hcit

What does the future look like for HCIT in terms of software development, education, research, and practices? What challenges could arise? Respond to at least two of your classmates' postings.

  What are the pros and cons of each option

what alternative ways could M-Bike consider in lieu of the joint venture option to expand into the Lalalandian market and what are the pros and cons of each option?

  Creating an mrp planning schedule

Assume that Z is made of two units of A and four units of B. A is made of three units of C and four of D. D is made of two units of E.

  What ordering cost would enable the manager

The manager would prefer ordering 10 times each month but would have to justify any change in order size. One possibility is to simplify order processing to reduce the ordering cost. What ordering cost would enable the manager to justify ordering ..

  Case study - forces model

You have been working for some time at Unique Shoes, a local shoe store that specializes in unusual shoe designs and custom fitting. Currently, customers come to the store to select their shoe designs and have their measurements taken for the custom ..

  Which methods are considered better first-choice methods

In your own words, describe crashing, fast tracking, and scope reduction as means of schedule compression. When would each be appropriate? Which methods are considered better first-choice methods by most project sponsors?

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