1. Janes Basic Botique sells approximately a constant 500 pairs of basic black flats every 3 months. Janes current policy is to order 500 pairs each time she places an order. It cost Jane $30 to place the order and her annual holding cost rate is 20%. The wholeseller Jane purchases from has the following quantity discount schedule:

Order Quantity Price per Pair 0-99 $35.00

100-199 $34.00

200-299 $32.50

300 or more $30.50

Based on the information, answer the following questions (you may want to input the information into Excel, though you do not have to):

(a) What is the minimum cost order quantity for the shoes? Would Jane ever choose to not get a discount?

(b) How much would you recommend Jane order to get the lowest cost? How much does it save her relative to her current situation? Explain.

(c) Suppose Janes Basic Botique is open 6 days a week for the entire year. If the lead time needed by the wholeseller moves from 14 days to 28 days, how does this change her reorder point?

(d) With the shift from in person shopping to online shopping due to COVID-19, demand for the shoes has fallen to 50 pairs every 3 months. What quantity would you suggest she order now? Why?

2. The Max Mart is a new grocery store in town that provides a coupon to customers based on their purchasing behaviour. As part of their opening, they have collected a sample of data for the first 2 months. The information that the store has on file is whether or not the coupon was utlized or not. The other information included is whether the consumer has downloaded their app or not and whether the consumer is part of their loyalty member program. The final piece of information reported is the maximium size of the possible discount on their next grocery bill. The data is listed as MaxMart.xlsx. Rachel Ria, the regional manager of Max Mart, has asked you to preform an analysis of the data and report back any interesting or important findings. To do this you will need to create a Logit Model to determine the probability of a particular type of customer utilizing the coupon or not.

(a) What is the outcome of the Model? I.e. show what z = 0+ 1x1+ 2x2+ 3x3 is where p = e z 1 + e z . Note: You do not have to calculate the standard errors for this.

(b) Given the average consumer (i.e. the average of all the x variables), what is the probability a consumer utilizes the coupon?

(c) What is the probability that a consumer who has not downloaded the app, is a loyalty member, and has received a $18.35 maximum coupon?

(d) How much does having the app increase the probability of using the coupon? What about the loyalty member program? If both programs cost the same amount of money to run, which would be more important to keep based on the data?

Price per Pair was in the question still i have highlated it