Mr. x manages a small greeting card shop that sells Christmas threes during the six weeks prior to Christmas based on past experiences and current circumstances Mr. x estimates that he will sell somewhere between 20 and 80 trees and that the actual number is equally likely to fall anywhere within that range

a tree costs Mr. x $28 and he sells it for $46 Due to very limited storage space, Mr. X is forced to sell any trees that remain after Christmas at half price

a) How many trees should Mr. X sell?

b) What is the probability of a stockout (having more demand than supply)?

c) To keep customers happy and return to the store, Mr. X feels that stockout should be avoided all possible. What is your recommended order quantity if Mr. X is willing to accept a 15% probability of stockout?

Answer rating: 100% (QA)

Answer COST 28 SALES 46 SALVAGE 23 SHORTAGE SALES CO... View the full answer