As the summer season approaches, BeyondBest - a retail store - is planning to stock a new
Question:
As the summer season approaches, BeyondBest - a retail store - is planning to stock a new model of ice cream maker at its store. The retail price for this ice cream maker will be set at $28. BeyondBest purchases this product directly from the manufacturer who sells each ice cream maker to BeyondBest for $20. Each ice cream maker costs the manufacturer $7.5 to make. The demand for this ice cream maker at BeyondBest for the upcoming summer season is estimated to be normally distributed with a mean of 100 and a standard deviation of 42.
At the end of the summer season, BeyondBest will sell any remaining inventory of the ice cream maker at the clearance price of "75% Off" from the original retail price.
What is the overage cost for the ice cream maker from BeyondBest's perspective?
What is the critical ratio for the ice cream maker from BeyondBest's perspective? Please enter your answer in the format of 0.xx.
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto