### Sales forecaster prediction to describe normal probability

Assignment Help Operation Management
##### Reference no: EM131147978

As with other products, Specialty faces the decision of how many Weather Teddy units to order for the coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, or 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team asks you for an analysis of the stock-out probabilities for various order quantities, an estimate of the profit potential, and for help with making an order quantity recommendation. Specialty expects to sell Weather Teddy for \$24 based on a cost of \$16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for \$5 per unit. After reviewing the sales history of similar products, Specialty’s senior sales forecaster predicted an expected demand of 20,000 units with a 0.90 probability that demand would be between 10,000 units and Prepare a managerial report that addresses the following issues and recommends an order quantity for the Weather Teddy product. 1. Use the sales forecaster’s prediction to describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its mean and standard deviation. 2. Compute the probability of a stock-out for the order quantities suggested by members of the management team. 3. Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales 10,000 units, most likely case in which sales 20,000 units, and best case in which sales 30,000 units. 4. One of Specialty’s managers felt that the profit potential was so great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios? 5. Provide your own recommendation for an order quantity and note the associated profit projections. Provide a rationale for your recommendation.

### Write a Review

#### What is the purpose of a cash-flow budget

What is the purpose of a cash-flow budget? What does it reveal? Of what value would it be to Regina? Who would generally review this information and what might they do with it? Be sure to analyze the topic very thoroughly and cite at least two..

#### True or false questions - mrp system

Bill of material errors can cause serious problems for MRP system calculations of dependant demands. No matter what forecasting technique is used, the probability of a production forecast being exactly correct is almost zero.

#### Resolving conflict and dealing with difficult people

Instructions: The final project requires you to develop a PowerPoint slide presentation for use as a training tool with line managers and supervisors on how to resolve conflict, as well as deal with difficult people, in the workplace. Many organizati..

#### Trade secrets are protectable

Trade secrets are protectable: (a) for seventeen years, (b) for nine years, (c) for as long as the company desires, or (d) for twenty three years

#### Sells three models of radar detector units

Oh No!, Inc., sells three models of radar detector units. It buys the three basic models (E, F, and G) from a Japanese manufacturer and adds one, two, or four lights (component D) to further differentiate the models. D is bought from a domestic pr..

#### Find range of output for alternative-yield lowest total cost

A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand ex..

#### Explain the employee salary data set

Complete the problems included in the resources below and submit your work in an Excel document. Be sure to show all of your work and clearly label all calculations.

#### Describe an initiative that could be implemented

Explain how the initiative you have selected for the organization might build on its strengths and/or address its weaknesses in supporting individuals and teams in a climate for creativity. Based on your observations and/or experience with the orga..

#### Effective practice under voluntary affirmative action plan

White Swan Motors’ practice of hiring only applicants recommended by its employees has been found to have an adverse impact on nonwhite applicants. White Swan plans to implement a voluntary affirmative action plan. Which of the following would be an ..

#### Using the sociotechnical systems theory

Describe the concept of HRD change in an organization using the Sociotechnical systems theory. Rationalize suitable interventions to address emotions of change.

#### Purchased a dime purportedly minted

Burkett, a coin dealer, purchased a dime purportedly minted in 1916 at the Denver Mint for \$450. The coin was considered rare and valuable. Burkett, in turn, sold the coin to Beachcomber Coins Inc. for \$500. An expert at Beachcomber examined the coin..

#### How are these programs advantageous

Many states have occasionally adopted amnesty programs that allow taxpayers to pay back taxes with reduced penalties. Besides the revenue generated, how are these programs advantageous? Could an amnesty program be used by a state that does not levy a..

#### 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