Which option would you select and why

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Reference no: EM133986613

Supply Chain Calculations

In this assignment, you will answer four questions based on a supply chain scenario.

Scenario: Carrier sells air conditioning units to distributors. Ahead of the upcoming summer, demand probability is 40,000 units (25%), 55,000 units (35%), 70,000 units (25%), and 80,000 units (15%).

Fixed cost of production = $500,000
Variable cost of production per unit = $1,200
Per unit selling price= $1500
Salvage value for unsold products = $900

Answer the following questions:

If the manufacturer is considering production quantities of 40,000 units or 80,000 units, assuming 90% of product will be sold and 10% will be salvaged, what is the profit per unit? Which option would you select and why?

The manufacturer is considering production quantities of 40,000 units or 80,000 units. For the 40,000 unit plan, assume 95% of product will be sold and 5% will be salvaged; for the 80,000 unit plan, assume 80% of product will be sold and 20% will be salvaged. What is the profit per unit? Which option would you select and why? Get AI-free online assignment help by the best tutors.

With an expected demand of 55,000 units for the summer (May-July), a maximum demand of 80,000 units for the summer, and a 2-week lead time, calculate the amount of safety stock needed to cover demand.

If the manufacturer chooses to produce 70,000 units but there is demand for 80,000 units, how much total profit and per-unit profit would be lost?

Reference no: EM133986613

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