Publisher for delivery at the beginning of two-month period

Assignment Help Operation Management

Reference no: EM132216779

A publisher sells books to Barnes & Noble at $40 each. The marginal production cost for the publisher is $20 per book. Barnes & Noble prices the book to its customers at $50 and expects demand over the next two months to have the following scenarios:

Quantity Probability

2000 3%

2100 8%

2200 15%

2300 30%

2400 17%

2500 12%

2600 10%

2700 5%

Barnes & Noble places a single order with the publisher for delivery at the beginning of the two- month period. Currently, Barnes & Noble discounts any unsold books at the end of two months down to $10, and any books that did not sell at full price sell at this price. How many books should Barnes & Noble order? 2351. What is its expected profit? 23510. What is the publisher’s expected profit? 47020 If the publisher and Barnes & Noble were integrated, what is the system optimal production quantity and expected profit under global optimization? 70,530.

Find a coordinating buy-back contract such that the sum of publisher’s and Barnes & Noble’s expected profit equal to 70,530 (system optimal production quantity and exp. profit under global optimization). Please show how the coordinating buy-back contract allocates the profit between the publisher and Barnes & Noble.

Reference no: EM132216779

Questions Cloud

Call center customer service representative-entry level : Would you recommend using your choice for a call center customer service representative/entry level?

Examine approaches to job design-redesign : Examine the four (4) approaches to job design/redesign and provide an example (not a definition) of each. Then, make a case to the interviewing panel.

Describe the three leadership styles : Describe the three leadership styles. Provide examples of these styles in society.

Process of carrying out sociological investigation : What specific questions must be answered as a researcher moves through their investigation?

Publisher for delivery at the beginning of two-month period : Barnes & Noble places a single order with the publisher for delivery at the beginning of the two- month period.

Need to penalize the offender : "The bigger the severity of social harm, the more the need to penalize the offender" highlights the principle of? Explain.

Robert merton strain theory : Based on Robert Merton's strain theory, what is most likely to happen if members of a society accept the society's objects

Why do you not want the job to be redesigned : Consider a job you hold now or have held recently. Would you want this job to be redesigned to place more emphasis on efficiency, motivation, ergonomics.

Describe the systematic practices formulated by social group : What is the best term to describe the systematic practices formulated by social groups in order to inspire its members to toe the line to social norms?

User Account

All Pages