36. Dilbert’s Department Store is trying to determine howmany Hanson T-shirts to order. Currently the shirtsare sold for $21, but at later dates the shirts will beoffered at a 10% discount, then a 20% discount, thena 40% discount, then a 50% discount, and finally a60% discount. Demand at the full price of $21 is believed to be normally distributed with mean 1800 andstandard deviation 360. Demand at various discountsis assumed to be a multiple of full-price demand.These multiples, for discounts of 10%, 20%, 40%,50%, and 60% are, respectively, 0.4, 0.7, 1.1, 2, and50. For example, if full-price demand is 2500, thenat a 10% discount customers would be willing to buy1000 T-shirts. The unit cost of purchasing T-shirtsdepends on the number of T-shirts ordered, as shownin the file P10_36.xlsx. Use simulation to determinehow many T-shirts the company should order. Modelthe problem so that the company first orders somequantity of T-shirts, then discounts deeper and deeper,as necessary, to sell all of the shirts.
36. Dilbert’s Department Store is trying to determine how
many Hanson T-shirts to order. Currently the shirts
are sold for $21, but at later dates the shirts will be
offered at a 10% discount, then a 20% discount, then
a 40% discount, then a 50% discount, and finally a
60% discount. Demand at the full price of $21 is believed to be
standard deviation 360. Demand at various discounts
is assumed to be a multiple of full-price demand.
These multiples, for discounts of 10%, 20%, 40%,
50%, and 60% are, respectively, 0.4, 0.7, 1.1, 2, and
50. For example, if full-price demand is 2500, then
at a 10% discount customers would be willing to buy
1000 T-shirts. The unit cost of purchasing T-shirts
depends on the number of T-shirts ordered, as shown
in the file P10_36.xlsx. Use simulation to determine
how many T-shirts the company should order. Model
the problem so that the company first orders some
quantity of T-shirts, then discounts deeper and deeper,
as necessary, to sell all of the shirts.
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