Marketing research forecasted that total demand across all stores would be normally distributed with a mean of
Question:
Marketing research forecasted that total demand across all stores would be normally distributed with a mean of 2,000 and a forecast error (standard deviation) of 500.Secondly, the higher margin only applied before Christmas. Any left-over after Christmas would be sold at deep discount of $195.
What do you think about Max’s Internet idea? Would it provide supply chain savings? The following questions may be helpful:
What order size would you recommend for a Palu store in the current supply network?
When should a Palu store place its order, assuming demand is steady and predictable?
In reality, demand fluctuate from week to week. In fact, past weekly demand at each store exhibited a standard deviation of about 30 jackets. How should the ordering policy be adjusted of each Palu store wants its stockout probability not to exceed 5%?
What are the supply chain inventory savings from adopting the Internet initiative? (For the financial evaluation, assume Palu Gear has an annual cost of capital of 20%.)
Statistics for Business and Economics
ISBN: 978-0132930192
8th edition
Authors: Paul Newbold, William Carlson, Betty Thorne