Winner Apparel Case Study $($please refer Excel file: Winner Apparel Case

Shell.xlsx$),$ build the decision model and answer the following questions:

a$)$ What is the expected order size in cycle $2$ for each of the products $($Trendy

and Basic$)?($for Two Orders in a Season scenario$)$

b$)$ For Two Orders in a Season scenario: would you recommend going with

the local supplier for either or both products?

c$)$ For which product was it profitable to place two orders in a season, and for

which product for it NOT profitable to do so$?$ Why? $($What was the

difference between the two products for this$)?$

d$)$ What would the maximum response premium need to be to make it

profitable to place two orders in a season for the product that is not a

good candidate for the same right now? Explain how you found the

answer to this question.

e$)$ The manager at Winner Apparel would like to do a sensitivity analysis for

the Trendy product line to determine how the Sales price per unit for that

product and the Standard Deviation of Season demand $($in the single order

per season scenario$)$ will affect the Expected profit per product.

Demonstrate how you can help the manager do this? How do these two

factors $($the sales price per unit and the SD of demand$)$ affect the decision

to place two orders in a season versus the decision to place only a single

order in a season? Explain. $(12$ points$)$

$2)$ In the textbook$/$ class example $($example $13\mathrm{.}5),$ we saw how to compute the

optimal CSL $($CSL$*)$ for continuously ordered items $($when backordered or lost

sales scenario$).$ Based on the Excel model and concepts, answer the following

questions:

a$)$ Given everything else being equal, for which condition $($backorder or lost

sales$)$ would the CSL$*$ be higher? Why?

b$)$ How does the cost of understock impact the optimal CSL$,$ re$-$order point and

safety stock? Again, provide a sensitivity analysis to show this.

c$)$ The manager would like to target a re$-$order point of $300$ units and safety

stock of $100$ units? Is this too high or too low? How can you tell?

$(8$ points$)$

$3)$ In the textbook$/$ class example on improved forecasting $($example $13\mathrm{.}6),$ we

saw how improved forecasts can increase expected profits. Based on the

Excel model and concepts, answer the following questions:

a$)$ Conduct a sensitivity analysis to show how the standard deviation of

demand affects the required optimal order quantity, CSL$,$ and expected

profit.

You will also notice that the standard deviation of demand does not

impact the CSL$.$ So how can improved forecasting $($through reduction of

standard deviation of demand$)$ improve expected profits? Explain