Suppose Nordic Boots was making production decisions for the following six boots: ot Price E(Demand) Std. Dev

Suppose Nordic Boots was making production decisions for the following six boots:

 

Transcribed Image Text:

Вot Price E(Demand) Std. Dev (Demand) Co Cu Exp. Profit Max. Profit A 220 1000 400 35.2 52.8 1101 39201 52800 230 2000 800 28.7 49.2 2269 74903 98400 C 190 3000 1500 22.8 45.6 3646 99495 136800 D 180 2000 1000 17.6 42.0 2538 63426 84000 E 180 1000 800 14.8 38.4 1471 24118 38400 F 150 4000 1000 25.0 30.0 4114 98201 120000 Q in the above table is the optimal newsvendor quantity and "Exp profit" is the newsvendor expected profit if Q is ordered with only one production opportunity. Capacity is limited with the 2nd production run, but the 2nd production run can be decided after actual demand is known. Furthermore, due to production minimums, a boot is produced either in the first production run or in the second production run, but not in both. The supplier insists that in the first production run at least 5000 units of boot commitment must be made. Which boots should be in the first production run and which ones should be in the second production run? Indicate the relevant-order quantities for each boot type and the expected total capacity commitment to the supplier in each production run. Вot Price E(Demand) Std. Dev (Demand) Co Cu Exp. Profit Max. Profit A 220 1000 400 35.2 52.8 1101 39201 52800 230 2000 800 28.7 49.2 2269 74903 98400 C 190 3000 1500 22.8 45.6 3646 99495 136800 D 180 2000 1000 17.6 42.0 2538 63426 84000 E 180 1000 800 14.8 38.4 1471 24118 38400 F 150 4000 1000 25.0 30.0 4114 98201 120000 Q in the above table is the optimal newsvendor quantity and "Exp profit" is the newsvendor expected profit if Q is ordered with only one production opportunity. Capacity is limited with the 2nd production run, but the 2nd production run can be decided after actual demand is known. Furthermore, due to production minimums, a boot is produced either in the first production run or in the second production run, but not in both. The supplier insists that in the first production run at least 5000 units of boot commitment must be made. Which boots should be in the first production run and which ones should be in the second production run? Indicate the relevant-order quantities for each boot type and the expected total capacity commitment to the supplier in each production run. Вot Price E(Demand) Std. Dev (Demand) Co Cu Exp. Profit Max. Profit A 220 1000 400 35.2 52.8 1101 39201 52800 230 2000 800 28.7 49.2 2269 74903 98400 C 190 3000 1500 22.8 45.6 3646 99495 136800 D 180 2000 1000 17.6 42.0 2538 63426 84000 E 180 1000 800 14.8 38.4 1471 24118 38400 F 150 4000 1000 25.0 30.0 4114 98201 120000 Q in the above table is the optimal newsvendor quantity and "Exp profit" is the newsvendor expected profit if Q is ordered with only one production opportunity. Capacity is limited with the 2nd production run, but the 2nd production run can be decided after actual demand is known. Furthermore, due to production minimums, a boot is produced either in the first production run or in the second production run, but not in both. The supplier insists that in the first production run at least 5000 units of boot commitment must be made. Which boots should be in the first production run and which ones should be in the second production run? Indicate the relevant-order quantities for each boot type and the expected total capacity commitment to the supplier in each production run. Вot Price E(Demand) Std. Dev (Demand) Co Cu Exp. Profit Max. Profit A 220 1000 400 35.2 52.8 1101 39201 52800 230 2000 800 28.7 49.2 2269 74903 98400 C 190 3000 1500 22.8 45.6 3646 99495 136800 D 180 2000 1000 17.6 42.0 2538 63426 84000 E 180 1000 800 14.8 38.4 1471 24118 38400 F 150 4000 1000 25.0 30.0 4114 98201 120000 Q in the above table is the optimal newsvendor quantity and "Exp profit" is the newsvendor expected profit if Q is ordered with only one production opportunity. Capacity is limited with the 2nd production run, but the 2nd production run can be decided after actual demand is known. Furthermore, due to production minimums, a boot is produced either in the first production run or in the second production run, but not in both. The supplier insists that in the first production run at least 5000 units of boot commitment must be made. Which boots should be in the first production run and which ones should be in the second production run? Indicate the relevant-order quantities for each boot type and the expected total capacity commitment to the supplier in each production run.

Answer rating: 100% (QA)

Sol BoatA 5280039200 13600 6181 220 220 Boot B 984007490O 23500 10217 3D 3D 230 230 Boot... View the full answer