A101 supermarket stores are buying a special ice cream from the producer to offer in a...
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A101 supermarket stores are buying a special ice cream from the producer to offer in a promotion period. A single order will be placed for the promotion period. Each ice cream costs $0.50, and any unsold ice cream will have to be scrapped at the end of the promotion. The profit margin from each ice cream is $1.00, and children are likely to go to a competitor if the fast-food company is out of ice creams. The demand for ice creams is forecasted to be normally distributed, with a mean of 50,000 and a standard deviation of 15,000. a) How many ice creams should be ordered in advance of the promotion? b) An issue has been raised that customers who go to competitors may be lost for the long term. It has been estimated that the cost of not having ice creams in stock is $5 per stockout because of the loss of current and future sales. How does this information affect the number of ice creams to be ordered? A101 supermarket stores are buying a special ice cream from the producer to offer in a promotion period. A single order will be placed for the promotion period. Each ice cream costs $0.50, and any unsold ice cream will have to be scrapped at the end of the promotion. The profit margin from each ice cream is $1.00, and children are likely to go to a competitor if the fast-food company is out of ice creams. The demand for ice creams is forecasted to be normally distributed, with a mean of 50,000 and a standard deviation of 15,000. a) How many ice creams should be ordered in advance of the promotion? b) An issue has been raised that customers who go to competitors may be lost for the long term. It has been estimated that the cost of not having ice creams in stock is $5 per stockout because of the loss of current and future sales. How does this information affect the number of ice creams to be ordered?
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Cost of shortage Cs Lost profit due to stockout 1 Cost of ex... View the full answer
Related Book For
Systems analysis and design
ISBN: 978-0136089162
8th Edition
Authors: kenneth e. kendall, julie e. kendall
Posted Date:
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