What is the service level associated with the phone

Reference no: EM133295842

Assignment:

Questions:

1. How many units should the retailer order from the manufacturer for this last order? Show all the steps. Explain your answer.

2. Suppose that the retailer offers another product that is a partial substitute of this phone. In this case, should the retailer be ordering a smaller or a larger quantity of the phone than the one obtained in 1.

Explain qualitatively your answer.

3. Based on the quantity suggested

a. What is the probability that the retailer will run out of phones at the end of the quarter? What is the service level associated with the phone? What is the fill rate you are expecting to have? Explain why there is a difference between the fill rate and the service level?

b. Given the demand uncertainty the retailer is facing, what is the expected profit of the retailer and of the manufacturer at the end of the quarter? What is the total profit of this simple supply chain?

4. What if the manufacturer happens to own the retailer? Revisit the previous questions and conclude on the total profit of the supply chain in this case?

Reference no: EM133295842

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