Question: Sarah Cheng would like to develop a more systematic approach for determining order quantities. Show all work to teach Sarah how to make these calculations
- Sarah Cheng would like to develop a more systematic approach for determining order quantities. Show all work to teach Sarah how to make these calculations for other products and stores.
- What is the in-stock probability for specialty buns that would maximize profit? Assume that unsold items have no salvage value. [2 points]
- Consider daily demand at the Aberdeen and Jordan stores. For which stores, if any, should weekday and weekend order quantities be different?
- Calculate the appropriate order quantities for the Aberdeen and Jordan stores. Note you will calculate between 2 and 4 quantities based on your answer above.
- What is the expected weekly profit at each store?
- Should the order quantity decisions be made at the corporate level or the store level? What are the advantages of each approach?
| Average Daily Demand (all data) | 1,146 | 2,959 | |
| Std. Dev. | 130 | 739 | |
| Average Daily Demand (weehdays only) | 3,345 | ||
| Std. Dev. | 403 | ||
| Average Daily Demand (weekend days only) | 1,896 | ||
| Std. Dev. | 250 | ||
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