Teddysports to maximize expected profit

Assignment Help Operation Management

Reference no: EM131030025

Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $10 each from its Asian supplier, TeddySports. Unfortunately, at the time of order placement, demand is still uncertain. Teddy Bower forecasts that its demand is normally distributed with mean of 2,100 and standard deviation of 1,200. Teddy Bower sells these parkas at $22 each. Unsold parkas have little salvage value; Teddy Bower simply gives them away to a charity.

a) How many parkas should Teddy Bower buy from TeddySports to maximize expected profit?

For parts b) through d), assume Teddy Bower orders 3,000 parkas (Q=3,000). b) What is Teddy Bower’s CSL (in-stock probability)?

c) On average, how many customers does Teddy Bower expect to turn away because of shortage? And on average, how many parkas will Teddy Bower liquidate after each season?

d) What is Teddy Bower’s expected profit?

Reference no: EM131030025

Questions Cloud

Differences between sampling frame and population : What is sampling frame? What are the differences between sampling frame and population? Use business examples to support your statements?

What is the optimum profit and planting for this situation : The Northwest Flower Company owns a greenhouse, which furnishes roses and carnations to florists in Oregon, Washington, and Idaho. The greenhouse can grow any combination of the two flowers. They sell the flowers in "bunches" with 25 blooms to a bunc..

What a function contained within a class : In C++, a function contained within a class is called

Common form of training is cooperative training : A common form of training is cooperative training. There are two widely used cooperative training methods: internships and apprentice training. In both forms of training, there is a combination of classroom training (formal education) and on-the-job ..

Teddysports to maximize expected profit : Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $10 each from its Asian supplier, TeddySports. Unfortunately, at the time of order placement, demand is still uncertain. How many parkas should Teddy Bower bu..

How expected return of each stock related to its riskiness : Which stock appears to be riskiest based on the annual standard deviation over the past five yearsa and the investment return rate of each stock is correlated with S&P 500 Index?

Define outbound telemarketing : While telemarketing can be a difficult career, companies continue to utilize inbound and outbound telemarketing activities because they are effective and cost efficient. Web-driven service technologies offer ever-expanding modes of communicating with..

Discussion of impact of monetary exchange rates : Prepare a paper that addresses the political and business risks and the rewards associated with global business operations. Include a discussion of the impact of monetary exchange rates on corporate profits (CO 9).

Question regarding the bond nominal yield to call : Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in5 years at a price of $1,120. What is ..

User Account

All Pages