Respuesta :
Answer:
Check the explanation
Explanation:
Demand Mean , u = 425
Standard deviation, s = 150
Selling price = p = $74
Cost price = c = $43
Salvage value = s = $24
Cost of understocking, Cu = p - c = $26
cost of overstocking , Co = c-s = $25
Critical ratio = Cu / (Cu + Co) = 26 / (26 +25) = 0.5098
Part A) Maximize expected profit
Optimal Order Q = Mean + Z-score * Std. deviation = 450 + 225 * Z-score
Z-score is 0 for P = 0.5000 and Z-score = 0.1 for P = 0.5398. Hence, Z-score = ~ 0.025
Optimal ORder = 450 + 225 * 0.025 = 455.62 or 456 (rounded off)
Part B) Z-score = 1.96 for P =0.975 , 97.5% in-stock probability
Order, Q = 450 + 225 * 1.96 = 891
Part C) Expected profit at 675 units. X = 675
Z-score = (X - Mean) / Std deviation = (675 - 450 ) / 225 = 1.00
for Z = 1 , I(Z) = 1.0833
Expected inventory = I (Z) * Std deviation = 1.0833 * 225 = 243.74
Expected Inventory = Order - Expected sales
Expected sales = Order - Expected inventory = 675 - 243.74 = 431.26
Expected Profit = Expected sales * (P-c) - (c-s)*Expected inventory = 431.25 * 26 - 243.74 * 25 = $5119
p-c = Profit per unit, c-s = loss per unit
Part D) Z-score = 1, X =675
For Z = 1 , p = 0.8413 (this is probability of instock)
Hence stockout probability = 1 - 0.8413 = 0.1587