Estimate of profit potential-order quantity recommendation

Reference no: EM13144930

Team recommended order quantities of 15000,18000,24000,28000 for a teddy bear. It would sell for $24 and costs $16. If inventory remains after holiday season it will sell surplus inventory for $5 per unit. They predicted an expected demand of 20000 units with a .95 probability that demand would be between 10000 units and 30000 units. They have asked for an analysis of the stock out probabilities for various order quantities, an estimate of the profit potential and to help make an order quantity recommendation.

Reference no: EM13144930

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