Question: Use the single-period inventory model to answer the following question. The Gap Inc. is trying to determine how many polo shirts they should order for

Use the single-period inventory model to answerUse the single-period inventory model to answer

Use the single-period inventory model to answer the following question. The Gap Inc. is trying to determine how many polo shirts they should order for the summer of 2013. The firm plans to sell each shirt at $18.99, while paying its supplier $13.99 for each shirt. If there are any leftover inventories, the firm can salvage its overstock at $1.99 at its outlet stores. The historical sales indicate that the likelihood (probability) of sales is as follows: Demand Probability Cumulative Probability 10,000 0.25 11,000 0.25 12,000 0.15 13,000 0.20 14,000 0.15 1. What is the cost of ordering not enough (cs)? 2. What is the cost of ordering too much (ce)? 3. What is the target service level at 12 10,000 0.25 11,000 0.25 12,000 0.15 13,000 0.20 14,000 0.15 1. What is the cost of ordering not enough (cs)? 2. What is the cost of ordering too much (Ce)? 3. What is the target service level cs/( Cs+ Ce)? | 4. What is the optimal number of polo shirts that Gap should order

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