Find buy-back agreements effective

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Question: What types of industries, beyond book publishing, supplier in Example to likely to find buy-back agreements effective?

Example: Suppose that the retailer SnowInc buys ski jackets from the Chinese manufacturer JacketCo. Due to the short selling season and long delivery lead time for this fashion good, this is a one-time purchase decision. SnowInc estimates the season's demand for one type of jacket to be normally distributed with mean 500 and standard deviation 100. Retail price for the jacket is $100. If not sold at the end of the season they unload them for $10 per jacket. The wholesale price JacketCo charges is $30 per jacket and JacketCo's per unit manufacturing cost is $12. How many jackets should SnowInc order and what are the two firms' profits? If both firms were owned by the same company, how would these answers change?

Reference no: EM131463499

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