Propose an ordering policy, Operation Management

Assignment Help:

Bookstore buys a popular freshman physics book at $30 each and sells it to students at $50 each.  The same book is used for Fall and Winter terms.  The demand for books is distributed Normally with a mean of 150 and 200 for Fall and Winter terms, respectively.  The standard deviation of demand is 50, for Fall as well as Winter terms.  The demand for each term can be assumed to be independent.   
 
The publisher comes up with a new edition every year, making the old edition of the book worthless.  The Bookstore simply throws away any leftover books at the end of the academic year (Winter Term). You have been asked to help the Bookstore in its purchasing decision for Physics books.

(a)  Suppose the Bookstore used a newsvendor model to order books for each term.  How many books should they order for Fall term and for the Winter term?

(b)   Bill Nye, the new purchasing guy, at the Bookstore thinks one can just use the total demand for the year and make one purchasing decision for the whole year.  How much should he order using this reasoning?  Why this order quantity is different than the sum of order quantities computed separately for Fall and Winter in part (a)?
 
(c)  What would YOU recommend to the bookstore?  Propose an ordering policy (with numbers, if you can) and explain why this is a better alternative.  Is your policy the best one can do?  Why (not)?


Related Discussions:- Propose an ordering policy

Describe the appropriate marketing-mix strategy, Marketers traditionally cl...

Marketers traditionally classify products on the basis of characteristics: durability, tangibility, and use (consumer or industrial).  for each product type by way of real-life exa

Explain it projects that should be a part of bill''s it plan, List and desc...

List and describe (in two or three sentences each) three IT projects that should be a part of Bill's IT Plan - one project to support each area and/or process identified in above

Rent-a-car liable for any claims, U.S. v. Farraj contended that he transmit...

U.S. v. Farraj contended that he transmitted information, not goods. Do you think that position is correct? Q2) Phillips v. Budget Rent-a-Car Answer the question "Is Budget Rent-a-

Explain planning and organizing in organizations, Why is there so much poor...

Why is there so much poor planning and organizing in organizations? How could the planning process be improved where you work? Has anyone considered using flow process charts

What software applications can support inbound logistics, Q. What software ...

Q. What software applications can support inbound logistics? The following software applications can support inbound logistics: Bar coding for the receipt, movement and

Who all are stakeholders affected by the stores'' decisions, Neda operates ...

Neda operates a small convenience store in a southern town that has a high tourist draw. After several years of operating the store, Neda has decided to no longer sell tobacco prod

List countries that lead in export and import of merchandise, The WTO's Int...

The WTO's International Trade Statistics is an annual report that provides comprehensive, comparable, and updated statistics on trade in merchandise and commercial services. This r

Explain does anyone have any insight, Does anyone have any insight into Dis...

Does anyone have any insight into Discussion Question, This was not discussed in class.

Describe leadership training and development, Training and Development -Sug...

Training and Development -Suggestions on how to write 1. Internet appeal how would you go about do that for fundraising 2 Print Advertisement 3. Special Events

Explain matching supply with demand, From "Matching Supply with Demand" Cac...

From "Matching Supply with Demand" Cachon/Terwiesch (Inventory Cost) A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. At the e

Write Your Message!

Captcha
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