5. Calculate the expected stockout cost for the following scenario. Customer Response Probability Cost per Incident...

 

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5. Calculate the expected stockout cost for the following scenario. Customer Response Probability Cost per Incident $150 Back Order Lost Sale Lost Customer O .50 .40 .10 $2,500 $50,000 How would your stockout costs change under the following scenarios? Please treat each scenario as independent from the others. o Scenario #1: A new competitor enters the market, offering a product that doubles defections. That is, among customers who try the new rival's product, twice as many switch permanently. Scenario #2: You modify your product/service offering so that only half as many customers are willing to buy from a rival. Among those who do buy elsewhere, the mix of lost sales/lost customers remains the same. o Scenario #3: More refined analysis reveals that the $50,000 cost of a lost customer is too low. The real costs are $250,000. 5. Calculate the expected stockout cost for the following scenario. Customer Response Probability Cost per Incident $150 Back Order Lost Sale Lost Customer O .50 .40 .10 $2,500 $50,000 How would your stockout costs change under the following scenarios? Please treat each scenario as independent from the others. o Scenario #1: A new competitor enters the market, offering a product that doubles defections. That is, among customers who try the new rival's product, twice as many switch permanently. Scenario #2: You modify your product/service offering so that only half as many customers are willing to buy from a rival. Among those who do buy elsewhere, the mix of lost sales/lost customers remains the same. o Scenario #3: More refined analysis reveals that the $50,000 cost of a lost customer is too low. The real costs are $250,000.