Question: This question was answered in another posts with wrong answers, please solve it with a correct answers. I need an expert answer not just copy
This question was answered in another posts with wrong answers, please solve it with a correct answers.
I need an expert answer not just copy and paste the same other posts.
(Teddy Bower Boots) To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor Teddy Sports has expertise in manufacturing those kinds of boots . Therefore, Teddy Bower contacted several Taiwanese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, $40 per boot was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 50 percent discount at the end of the season. Given the $54 priceTeddy Bower's demand forecast is for 400 boots with a standard deviation of 300.
a. If Teddy Bower decides to include these boots in its assortment , how many boots should it order from its supplier ?
b. Suppose Teddy Bower orders 380 boots What would its expected profit be?
c. John Briggs , a buyer in the procurement department, overheard at lunch a discussion of the "boot problem." He suggested that Teddy Bower ask for a quantity discount from the supplier . After following up on his suggestion , the supplier responded that Teddy Bower could get a 10 percent discount if they were willing to order at least 800 boots . If the objective is to maximize expected profit , how many boots should it order given this new offer?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
