L&L Ltd. is an mp3/mp4 player manufacturer who produces more than 20 different models in order...

 

Transcribed Image Text:

L&L Ltd. is an mp3/mp4 player manufacturer who produces more than 20 different models in order to meet the diverse customer demands. Due to the long lead time, each year the company can place only two orders to its suppliers in Taiwan. The first order is placed in January solely based on the company's past experience. As the selling season progresses, the company observes actual demand and utilizes the demand information to adjust its original forecasts. Based on the adjustment, the company places its second order in May. The product information of three mp3 players is listed in the table. Assume gross margin = 10% and loss on unit salvaged = 5% (if critical ration=0.667, then use Z=0.45). Product Price d A B C Od 149 900 400 299 500 267 99 1505 320 Cu Co Q Mismatch Cost 3857 5489 1659 Mismatch Cost Ratio 21. Which product has the highest optimal order quantity? L&L Ltd. is an mp3/mp4 player manufacturer who produces more than 20 different models in order to meet the diverse customer demands. Due to the long lead time, each year the company can place only two orders to its suppliers in Taiwan. The first order is placed in January solely based on the company's past experience. As the selling season progresses, the company observes actual demand and utilizes the demand information to adjust its original forecasts. Based on the adjustment, the company places its second order in May. The product information of three mp3 players is listed in the table. Assume gross margin = 10% and loss on unit salvaged = 5% (if critical ration=0.667, then use Z=0.45). Product Price d A B C Od 149 900 400 299 500 267 99 1505 320 Cu Co Q Mismatch Cost 3857 5489 1659 Mismatch Cost Ratio 21. Which product has the highest optimal order quantity?