Question: A home improvement store sells hydrangea plants during the spring planting season. The hydrangeas cost the store $15 per unit, and sell to customers for
A home improvement store sells hydrangea plants during the spring planting season. The hydrangeas cost the store $15 per unit, and sell to customers for $55, but any leftovers at the end of the season are salvaged to a local landscaper for $6/unit. A competitor has advertised that it guarantees 99% of customers find the product theyre looking for in stock. The competitors posted price for hydrangeas is $60, and they salvage to the same local landscaper for $6/ hydrangea plant. If the competitors advertised service level is correct for hydrangeas and they follow an optimal stocking policy, what does it imply their cost per hydrangea is?
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