What is the optimal quantity q that the book store

Assignment Help Operation Management

Reference no: EM133532183

Question: Purdue Book Store is trying to decide on how many copies of a book to purchase from the McGraw Hill publisher at the start of a selling season. The book retails at $28 per copy at the book store, and costs $15 for the book publisher to produce each copy. Purdue Book Store will dispose of all of the unsold copies of the book at 50% off the retail price at the end of the season.

It is estimated that demand for this book during the season is Normal with a mean of 1000 and a standard deviation of 250.

We consider the book publisher ("supplier") and the book store ("retailer") as a simple supply chain.

First, consider the centralized case where the supplier and retailer belong to the same company. What is the optimal quantity Q that the book store should order from the publisher to maximize the total supply chain's profit? Round upQ to integer if necessary.
Then, consider the decentralized case without any coordination. The publisher sells the book to the book store at $21 per copy. Now, what is the optimal quantity Q that the book store should order from the publisher to maximize his own expected profits? Round up Q to integer if necessary.

Reference no: EM133532183

Questions Cloud

Discuss economics of people who work in the drug trade : Discuss the economics of people who work in the drug trade, from the source to street delivery, from the people at the very beginning of the process

List three network threats and list it infrastructure domain : List three network threats and list the IT infrastructure domain that the threat may harm. Why/How does those threats harm that particular domain?

Explain how each of the five pillars of sustainable change : Explain how each of the five pillars of sustainable change could be applied to sustain the learning organization environment of the company in the scenario

Describe at high level how team and framework will function : Describe at a high level how the team and framework will function, using as many relevant terms and concepts from Scrum as possible.

What is the optimal quantity q that the book store : what is the optimal quantity Q that the book store should order from the publisher to maximize his own expected profits? Round up Q to integer if necessary

Crack cell phones needed for criminal investigations : Should Apple be forced to assist the Government's efforts to crack cell phones needed for criminal investigations?

How the five competitive forces influence profitability : How the five competitive forces influence profitability and develop a strategy for enhancing their organization's competitive advantage

Describe the role of organizational development : Describe the role of organizational development in contemporary organizations. How does organizational development help organizations prepare for or implement

Describe ways by which the company can integrate : Describe ways by which the company can integrate corporate responsibility principles into their operations. Which of these do you believe to be the most

User Account

All Pages