the total supply chain profit, Supply Chain Management

Tom owns an independent bookstore located in Philadelphia.  Tom has to decide on the best order quantity for a new self-help book that is to be released soon.  The books will each cost Tom $20 but will retail for $30.  At the end of the season, Tom can dispose of all of the unsold copies of the book at $5 each.  Tom estimates that demand can be represented by a normal distribution with mean 240 and a standard deviation of 100. The publisher’s cost per book is $7.

a.    What order quantity maximizes Tom’s expected profit?

b.    What is Tom’s expected profit?

c.    What is the resulting profit for the publisher?

Now consider the supply chain to be a single (vertically-integrated) entity.

d.    What quantity will maximize the supply chain’s profit?  

e.    How much is the total supply chain profit?

The publisher is proposing a buy-back arrangement: At the end of the season, they will buy back all unsold copies at $15.00. However Tom is responsible for shipping unsold copies back to the publisher at $1 per book.  
 
f.    What quantity should Tom order if he wishes to maximize his expected profit?

g.    What is the resulting profit for the publisher?

h.    What is the total profit for the supply chain?

Consider the question of the best buy-back price.

i.    Compute the best buy-back price.

j.    Compute the resulting profit for Tom under the best buy-back price.

k.    Compute the resulting profit for the publisher under the best buy-back price.

l.    What is the total profit for the supply chain now?

Posted Date: 3/16/2013 5:34:02 AM | Location : United States







Related Discussions:- the total supply chain profit, Assignment Help, Ask Question on the total supply chain profit, Get Answer, Expert's Help, the total supply chain profit Discussions

Write discussion on the total supply chain profit
Your posts are moderated
Related Questions
The business section of the International Herald Tribune carried a story with the headline "Hark! The Herald Angels Sing of Teleconference," (Peter H. Lewis, New York Times Service

Critically summarize the article, "Ethical Dilemmas in Forecasting for Public Policy" by Martin Wachs in approximately 800 words. Carefully explain how the author explores the nat

tangible and intangible of scm

what is the potential negative or downside to the long-term Starbucks-OHL collaboration? identify what you consider to be three major potential problems in such long term relations


How has BASF''s differentiated supply chain models worked to leverage its economies of scale and extensive knowledge of its customers'' industries?

In 2008, the world economy experienced so-called global recessions, sharp falls in income and rapid increases in unemployment. a. Briefly summarize the main causes for the globa

WHAT IS THE DIFFERENCE BETWEEN SUPPLY CHAIN AND VALUE CHAIN


Question 1: Describe the several principles of Quality Management Systems. Describe Quality Management System Principles of Quality Management Systems Conclusion