The monthly Toronto Maple Leaf fan magazines are printed one week before sales start for each monthly issue during the season. Attendance averages 90,000 screaming and loyal Leafs fans during the life of each issue. Two-thirds of these fans usually buy the program, following a normal distribution, for $4 each. Unsold programs are sent to a recycling center that pays only 15 cents per program. The standard deviation is 4,500 programs, and the cost to print each program is $1.5.

Questions:-

1. What is the cost of underestimating demand for each program?

2. What is the overage cost per program?

3. How many programs should be ordered per game?

4. What is the stock out risk for this order size?

Answer rating: 100% (QA)

SOLUTION To answer the questions we need to calculate various costs and quantities based on the provided information Lets go through each question step by step 1 Cost of underestimating demand for eac... View the full answer