Primarily for the halloween season

Assignment Help Operation Management

Reference no: EM132112543

1. Pony Express Creations Inc. is a manufacturer of party hats, primarily for the Halloween season. One of their popular products is the Elvis wig, complete with sideburns and metallic glasses. The Elvis wig is produced in China, so Pony Express must make a single order well in advance of the upcoming season. Ryan, the owner of Pony Express, estimates demand for this particular product during this year’s selling season as follows:

With probability of 0.50, demand will be no more than 20,000 units

With probability of 0.75, demand will be no more than 35,000 units

With probability of 0.95, demand will be no more than 45,000 units.

The Elvis wig retails for $25 each and its wholesale price is $12 each. Any leftover can be sold to discounters at $2.50 each. Given the information above, carry out a marginal analysis for Ryan if he decides to order 20,000 units, or 35,000 units, or 45,000 units. Based on your calculation, which of these three order sizes would bring him the highest expected profit?

2. In Question 1 above, if Ryan predicts that the demand follows a normal distribution with a mean of 30,000 units and a standard deviation of 5,000 units, what should he order to maximize his expected profit?

Reference no: EM132112543

Questions Cloud

Create the model spreadsheet : Create the model spreadsheet. Create a report for the results and label the tab.

Find the quadratic equation for the distance : Find the quadratic equation for the distance, D, in terms of the time, the acceleration due to gravity, and the speed of sound. Arrange the expression.

Design small marketing research experiment : Design a small marketing research experiment. How will you establish that your findings are valid?

What is the stones mass height above the place : Why are there two answers to b? I said because the stone reaches the given hieght two time, on the way up and then again on the way down

Primarily for the halloween season : Pony Express Creations Inc. is a manufacturer of party hats, primarily for the Halloween season.

How far does an electron travel along the wire : How far does an electron travel along the wire while the starter motor is on? (The density of conduction electrons in copper is n = 8.50Ã-1028 1/m3.)

How much time elapses until the boat is first : A stationary boat in the ocean is experiencing waves from a storm. The waves move at 55 km/h and have a wavelength of 160 m. The boat is at a crest of a wave.

Green and littleville family health plan : In regard to John Parker, Dr. Green and Littleville Family Health Plan. Please analyze each of the claims maid by the plaintiff agains Dr. Green and the Plan.

What is the ration of the kinetic energies : A solid sphere and a solid disk of the same mass and radius are rolling wihtout slipping at the same speed. What is the ration of their kinetic energies?

User Account

All Pages