4. Nordic Inc. has designed four ski-boot styles it plans to sell in the next winter...
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4. Nordic Inc. has designed four ski-boot styles it plans to sell in the next winter season: Terrain, Blizzard, IceFix, and Freezdom. Nordic can produce some ski-boot styles well in advance of the selling season, with the remaining styles produced after the next Ski Elite Athletes Trade (SEAT) show that occurs before the selling season. At the time it makes its initial procurement decision, Nordic's forecast for each boot's demand is normally distributed with means and standard deviations listed in the table below. The table also shows results from the newsvendor model when expected profit is maximised. Boot Price 200 150 120 Freezdom 100 Terrain Blizzard Icefix Std. Mean Demand Dev. 100 30 150 200 300 50 70 50 Co 16 20 BMGT43830-Supply Chain Operations 9.6 8 Cu .../Over 48 60 28.8 24 Page 3 of 4 121 184 248 334 (a) What is Nordic's expected profit if Nordic decides to produce every boot style after the SEAT show (assuming all the product arrives at the start of the selling season)? (b) Because the SEAT show concludes shortly before the selling season, Nordic has limited capacity for production after the show. As a result, it needs to produce at least 300 pair of boots before the show. Note that each boot style is produced either before or after the show (i.e., no style is produced both before and after the show). How many pairs of boots should Nordic produce before the seat show? 4. Nordic Inc. has designed four ski-boot styles it plans to sell in the next winter season: Terrain, Blizzard, IceFix, and Freezdom. Nordic can produce some ski-boot styles well in advance of the selling season, with the remaining styles produced after the next Ski Elite Athletes Trade (SEAT) show that occurs before the selling season. At the time it makes its initial procurement decision, Nordic's forecast for each boot's demand is normally distributed with means and standard deviations listed in the table below. The table also shows results from the newsvendor model when expected profit is maximised. Boot Price 200 150 120 Freezdom 100 Terrain Blizzard Icefix Std. Mean Demand Dev. 100 30 150 200 300 50 70 50 Co 16 20 BMGT43830-Supply Chain Operations 9.6 8 Cu .../Over 48 60 28.8 24 Page 3 of 4 121 184 248 334 (a) What is Nordic's expected profit if Nordic decides to produce every boot style after the SEAT show (assuming all the product arrives at the start of the selling season)? (b) Because the SEAT show concludes shortly before the selling season, Nordic has limited capacity for production after the show. As a result, it needs to produce at least 300 pair of boots before the show. Note that each boot style is produced either before or after the show (i.e., no style is produced both before and after the show). How many pairs of boots should Nordic produce before the seat show?
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The question presented concerns a supply chain decision involving skiboot styles that Nordic Inc intends to sell To tackle each part of the question we need to use the given information and apply conc... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1259548185
8th edition
Authors: David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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