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
describe three buying situations and the Service Output Demand of the buyer in each one.

Hello, I am looking for a tutor in my scm assignement (actually explanation). Anyone can help?

Aerial Products maintains a safety stock of 5 airframes in any given week. The owner likes to have the supply as a just in case buffer.  Given the weekly demand in the data table i

Case study 2000 words

Problem 1: (a) Define the terms ‘ inventory' and ‘inventory control'. (b) State the classification of supplies for inventory purposes in your organisation. (c) List the a

Describe the supply chain for milk?


(i)   Investigating sustainable supply chain issues (ii)  How to manage and response to these sustainable supply chain issues You need to identify, critically evaluate the su

Kateville Textile Printing Company Ltd Introduction Kateville Textile Printing Company Ltd. design company which produces design fashion products and distribute to all branches of

What is the factors influencing demand in organic food market? Organic Food Market Organic farming is influenced by several factors. In this section, we analyse the factors tha