What is the optimal service level if the ordering decision

Assignment Help Operation Management
Reference no: EM133345571

Case Study: Tech Fiber (TF) is a manufacturer of synthetic fibers used in ski jackets and other winter outerwear. TF has patented a new lightweight fiber that is very inexpensive to manufacture but has the warmth and water-repellent properties of very expensive natural fibers. TF has designed a new jacket using this fiber that it wants to bring to the market. The jacket will be sold exclusively through Ski Adventure (SA), a major retailer of winter apparel and sport equipment. Each jacket costs $10 to produce and TF plans to charge a wholesale price of $100 per jacket from the retailer. The retailer plans to sell the jacket for a price of $200. At this price, the manager at SA estimates the demand for the new jacket to be normally distributed with a mean of 1,000 and a standard deviation of 300. SA is unable to salvage anything for unsold jackets.

Question: What is the optimal service level if the ordering decision is made by the manager of SA, i.e. maximizing SA profit only?

 

Reference no: EM133345571

Questions Cloud

About dunder-mifflin of scranton : How can I/O psychology be applied to various fictional organizations? what would an I/O psychologist think about Dunder-Mifflin of Scranton (The Office)?
At what inventory level should she place an order : MBA 605 Coastal Carolina University What is the economic quantity for Paula to order and At what inventory level should she place an order
What is the equipments annual inventory ordering cost : A medical equipment has an average annual demand is 367 units in a clinic. Its unit cost is $101. It costs the clinic $59 to place an order, and the per unit
Exclusive rights of copyright holders : Which of the exclusive rights of copyright holders might you be infringing if you did not get permission from Maya Angelou's estate to recite this poem
What is the optimal service level if the ordering decision : What is the optimal service level if the ordering decision is made by the manager of SA, i.e. maximizing SA profit only?
What are some of these differences : In the context of profitable growth, differentiate between a low-cost strategy and a differentiation strategy with an example.
Explain the purpose of conducting accident investigations : Explain the purpose of conducting accident investigations in general. Then, explain the need for one in this situation. Compare multiple investigation
How can businesses join forces online using web 2.0 : How can businesses join forces online using Web 2.0 applications? Consider what influence future Web capabilities (Web 3.0) will have on how businesses
Explain the nature of peters error : Explain the nature of Peters error (i.e., random versus systematic). Consider both the direct and indirect effects of this error in your answer

Reviews

Write a Review

Operation Management Questions & Answers

  Declaration of two or more directors erifying

Declaration of two or more directors erifying the particulars of all members/partners;

  Influence the formulation of policies and procedures

Provide an example of how an organization which is structured in a hierarchical fashion can influence the formulation of policies and procedures.

  Why is power important to negotiators

Power in negotiation and why is power important to negotiators?

  The additional work or supplying the additional goods

What recourse does the prime contractor have to recover additional costs incurred in doing the additional work or supplying the additional goods?

  Compute the monthly break-even point for the new toy

A small, inflatable toy has come onto the market that the company is anxious to produce and sell.

  Project managers whenever engaging stakeholders use

project managers when engaging stakeholders use techniques mentioned in this module. are some of these techniques

  Listen-elasticity is important

“Listen, elasticity is important,” said the director of the aquarium, “but we borrowed $21.6 million (for 20 years, other fixed costs are $10,000 per month; total fixed costs per month are $100,000) to build the aquarium last year.  Furthermore, ther..

  Use complex integrating mechanisms

When does an organization need to use complex integrating mechanisms? Why? Under what conditions is an organization likely to prefer (a) a mechanistic structure, (b) an organic structure, or (c) elements of both?

  What are the two pillars of executive ethical leadership

What are the “two pillars” of executive ethical leadership? What is the “Garden Metaphor” as it relates to organizational culture?

  Differences between job enrichment and job enlargement

Critique the differences between Job Enrichment and Job Enlargement.

  Process output exceeds the upper control limit

Operator action is required when process output exceeds the upper control limit (UCL) or dips below the lower control limit (LCL).

  The works of the social contract theorists

Given Churchill's comment, and the works of the social contract theorists, is Democracy the best form of government today?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd