What is the value of 501st toy

Assignment Help Operation Management

Reference no: EM133651672

Assignment:

A small city toy store manager forecasts that the demand for the new Lite-Brite Super Brite HD Barbie Editions will be increased during holiday season this year. She did some research and received following possibilities for demand. She realizes the Barbie edition is perishable and may not sell after the season! As a consultant you should advise her how many Lite-Brite Super Brite HD Barbie Editions she should order to maximize her expected profit?

D ≤ 500 with probability 0.5
D ≤ 550 with probability 0.75
The shop buys toys from a distributor at a unit cost of $15.
The shop sells toys at a unit price of $25
Any unsold toys has a salvage value of $7.

(Note: D is the demand, not the demand rate in EOQ model; and we assumed this specific toy is perishable.)

What is the value of 501st toy?
What is the value of 551st toy?
What is the optimal order number to maximize the profit?

Reference no: EM133651672

Questions Cloud

What was impact on costs to the organization-customers : What was the impact on costs to the organization and/or its customers? How did the organization address the issue?

Importance of jet engine development : The importance of jet engine development. How engine technology has improved to meet FAA noise, reliability, and durability requirements.

Evaluate a key-core business process : Pictorially present the as-is state and propose a 'to be' state at National Commercial Bank, Jamaica. Justify your proposed 'to be' state.

What must a companies do before entering a foreign market : What must a companies do before entering a foreign market? What are imports and exports? Why do companies export?

What is the value of 501st toy : What is the value of 501st toy? What is the value of 551st toy? What is the optimal order number to maximize the profit?

Difference between reactive-proactive knowledge management : What is your understanding of the difference between reactive and proactive knowledge management? Discuss the pros and cons of each.

Why do leading ingos even need to work : Based on the readings and lectures Leading INGOs appear to have most of the influence and authority in global civil society.

Discuss the importance of performance management : How can effective performance management contribute to achieving strategic objectives, improving employee performance.

What is the forecast for november : October forecast was 37 units. Using exponential smoothing method with a smoothing constant of 0.3, what is the forecast for November?

User Account

All Pages