Rattel is deciding how many units of their toys they order from their supplier in China. Since
Question:
Rattel is deciding how many units of their toys they order from their supplier in China. Since it takes so long to produce and ship from China and the year-end holiday season is so short, there is only one chance to order for the holiday season. Rattel estimates the demand (in 1000s) during the holiday season is normal with a mean of 100 and a standard deviation of 20. Units purchase cost is $750, and the selling price is $1500. In case there are any leftover toys at the end of the year, you can sell all of them at $500 during "After holiday sales" in January.
a) how many units should Rattel order? Consider a range of 70 units to 130 units, with a step size of 1.
b) if Rattel orders the optimal quantity you found is (a) above: i) What is the probability that Rattel will have a stock out? ii) On average, how much revenue will Rattel lose due to stockouts?
Answer the above questions using either using Crystal Ball or using a two-way table (for (a)/one-way table (for (b)) with a step size of 5. Simulate 1000 trials.
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam