During the summer season, the demand for basic white color baby t-shirts sold by the retailer Happy Baby is normally distributed a mean of 1500 and a standard deviation of 204 units. happy baby makes only one ordering for these white baby t-shirts to the manufacturer before the start of the summer season. The manufacturer sells to the retailer at 20 TL unit. then the retailer sells to the end customer for 44 TL/unit during the season. the unsold units at the retailer by the end of season are sold by the retailer with a big end of season sale for 9 TL/unit.

a) calculate the cost of shortage (cu) and overage cost (c0) for one t-shirt for the retailer?
b) what is the optimal order quantity for the retailer at the beginning of the season?
c) according to the optimal order quantity what is the amount of safety stock?

Answer rating: 100% (QA)

a Cost of ShortageCu for retailer Selling Price for re... View the full answer