Determine the number of bags for women

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The buyer of Elegancia, a famous "select" department store, must determine the number of bags for women, whose price is high and which will be imported from Italy for the next Christmas season. The unit cost of the bag for the warehouse is $ 28.50, and it will sell for $ 150.00. Anything that does not sell at the end of the season is bought by discount stores at $ 20. In addition, the Elegance counters estimate that there is a cost of 0.40 for every fixed dollar in inventory, because invested in something else would have produced a gross profit. Assume that this cost only applies to unsold bags.

a) Suppose that the sales of the bags are equally likely for all values between 50 and 250 units during the season. With that base. How many bags should you buy? (Hint: This indicates that the correct distribution of demand is uniform You can solve this problem by assuming a discrete or continuous uniform distribution)

b) A detailed analysis of the above data indicates that the quantity sold of bags is better approximated with a distribution with average 150 and 20 standard deviation. Now, what is the optimal amount of bags that should be purchased?

c) The expected demand was the same in parts a) and b), but the optimal order quantities must be different. What accounts for this difference?

Reference no: EM132238811

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