Manufacturer of lawn care equipment

Assignment Help Operation Management

Reference no: EM132258538

Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. The anticipated demand is normally distributed with a mean of m = 100 and a standard deviation of s = 40. Each unit costs $150 to manufacture and the introductory price is to be $200 to achieve this level of sales. Any unsold units at the end of the season are unlikely to be very valuable and will be disposed off in a fire sale for $50 each. It costs $20 to hold a unit in inventory for the entire season. How many units should Green Thumb manufacture for sale? What is the expected profit from this policy? On average, how many customers does Green Thumb expect to turn away because of stocking out? Input the data from the problem into the Input section of the spreadsheet and respond to the three questions posed in the problem. Expand upon the solution by considering the following: Green Thumb has investigated ways to improve its profitability. Option 1: they have found an outlet that will pay them $60 per unit for overstocks. Option 2: they are exploring raising the price from $200 to $230 per unit. However, the mean demand is expected to drop from 100 to 70. Option 3 involves a retrofit to their manufacture process that would reduce unit cost from $150 to $130. However, the cost of the retrofit adds back $10 to each unit. By manipulating the input data, determine the Cu, Co, CSL, EO, EU and profit for each option individually and in any combination. Which would you choose and why? SHOW A SUMMARY TABLE OF YOUR STUDY IN THE EXCEL SPREADSHEET.

Reference no: EM132258538

Questions Cloud

Explain IT applications for increasing internal coordination : Explain IT applications for increasing internal coordination and efficiency.

Element in the promotion mix for most international? firms : Which is the MOST important element in the promotion mix for most international? firms?

Four elements of the marketing mix : Which of the following is NOT one of the four elements of the marketing mix?

Total cost of ownership in supplier performance metric : What is meant by "Cost/Price, Quality, Delivery, Responsiveness and Flexibility, Technology , and Total cost of Ownership" in Supplier Performance Metric.

Manufacturer of lawn care equipment : Green Thumb, a manufacturer of lawn care equipment, has introduced a new product.

Difference in use of power between good and great leaders : What is the difference in how power is exercised by leaders at various levels? What might be the difference in the use of power between good and great leaders?

Check the internet to find information about safety culture : Check the Internet to find information about "safety culture." Examine a few Web sites related to a safety culture in health care.

Implement the linear optimization model : Implement the linear optimization model in excel and use solver to find an optimal solution.

Decision to move toward mass marketing campaign : Which of the following questions is NOT relevant to Cintab's decision to move toward a mass marketing campaign?

User Account

All Pages