Reference no: EM13126289
Specialty faces the decision of how many Weather Teddy units to order for coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team ask you for analysis of the stock-out probabilities for various order quantities, an estimate of the product potential, and to help make an order quantity recommendation. Specialty expects to sell Weather Teddy for $24 based on cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing the sales history of similar products, Specialty's sales forecaster predicted and expected demand of 20,000 units with a .95 probability that demand would be between 10,000 units and 30,000 units.
Prepare a managerial Report that addresses the following issues and recommends an order quantity for the Weather Teddy product.
1. Use the sales forecaster's, predictions to describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its means and standard deviation.
2. Compute the probability of a stock-out for the order quantities suggested by members of the management team.
3. Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales equal 10,000 units, most likely case in which sales equal 20,000 units, and best case in which sales equal 30,000 units.
4. One of Specialty's manager felt that the profit potential was so great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be order under this policy, and what is the projected profit under the three sales scenarios?
5. Provide your own recommendations for an order quantity and note the associated profit projections. Provide a rationale for you recommendation.
|
Issuance of the finicial statements
: Company A hired Q to perform its year end audit. Subsequent to the compleation of field work, but prior to the issuance of the finicial statements, A discovers that one of its customers has filed for bankruptcy protection.
|
|
Illustrate what is amount of bob business gift deduction
: During the 2011 holiday season, Bob, a barber, gave business gifts to 34 customers. The values of the gifts, which were not of a promotional nature, were as follows: For 2011, illustrate what is the amount of Bob's business gift deduction?
|
|
On the sonnet
: If by dull rhymes our English must be chain'd,And, like Andromeda, the Sonnet sweet Fetter'd, in spite of pained loveliness,
|
|
Describe two different ways by which electrons
: Describe two different ways by which electrons can move from the valence band to the conduction band.
|
|
Sales forecaster-s predictions to explain normal probability
: Use the sales forecaster's, predictions to describe a normal probability distribution that can be used to approximate the demand distribution.
|
|
Create the journal entry to record the payroll tax expense
: federal unemployment compensation taxes are $5,250. at the federal rate of 0.8% and state rate of 5.4%. Create the journal entry to record the payroll tax expense for the period.
|
|
Investments consist of treasury bills
: Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the current asset section of Janson's December 31, 2009, balance sheet?
|
|
Compute the concentrations of the protoneated
: Calculate the concentrations of the protoneated and unprotonated forms of bromothymol blue in 100 mL of a pH 8.1 buffer solution to which 1.0 mL of 0.005 M solution of bromothymol blue in 80% wate/20%ethanol has been added.
|
|
What mass of as2i4 was actually isolated
: The compound As2I4 is synthesized by reaction of arsenic metal with arsenic triiodide. If a solid cubic block of arsenic (d 5.72 g/cm3) that is 3.03 cm on edge is allowed to react
|