A company has two products, which both sell in quantities of 20. Product A sells for$35/unit with a profit margin of 20%. Product B sells for $50/unit with a profit marginof 13%. Product A has a lost sale probability of 25% when out of stock, and Product Bhas a lost sale probability of 35% when out of stock. Which product is the more"expensive", in terms of lost sales, if it were to experience a stockout?O No answer text provided.O Product AO They both have the same cost of lost salessameO Product B

When a product's orders from customers exceed the available stock, stockout occurs. When demand…

Answered: A company has two products, which both…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Imagine that you are the chief operations officer (COO) of Amazon.com. You are interested in creating a competitive advantage for your company (compared to other online retailers) in that you wish to be able to provide to your customers faster shipping than you have been able to provide with your existing set of warehouses and fulfillment centers. It has been decided that using overnight shipping on every order (which would, of course, be about as quick as shipping could be) has been eliminated as a possibility due to being prohibitively expensive. Describe what you would recommend as the COO to improve the speed with which Amazon.com customers receive the products that they have ordered. What negative consequences or disadvantages, if any, do you see as a result of your proposed solution?
When consumers believe only an infinite supply of a product exists, the perceived value of the product might increase. * True O False
A company purchased an item that is in the 7-year property class and has a cost basis of $12000. If the company purchased the item in a year that allowed 50% bonus depreciation, how much would the company be allowed to depreciate the asset in year 1 if the balance of the asset basis (after the bonus depreciation is deducted) was depreciated using the MACRS? Report your answer to the nearest dollar. Be sure to include in your answer the sum of both the bonus depreciation and the MACRS depreciation.
A piece of industrial machinery costs $48,000 to replace and has essentially no salvagevalue. Over the first five years of operation, maintenance costs amounted to $8,000. Ifthe maintenance cost rate is a linear function of time, what is the optimal age at whichto replace the machinery?
Large-scale integrated (LSI) circuit chips are made in one department of an electronics firm. These chips are incorporated into analog devices that are then encased in epoxy. The yield is not particularly good for LSI manufacture, so the AQL specified by that department is 0.15 while the LTPD acceptable by the assembly department is 0.40. Assume the company is willing to accept a consumer's risk of 10 percent and a producer's risk of 5 percent. Find the sample size. Use Exhibit 10.16. Note: if the exact value of the computed LTPD ÷ AOQ ratio does not appear in Exhibit 10.16, use the next higher ratio. Note: Round up your answer to the next whole number. How would you tell someone to do the test?
Damen Ship Repair has just introduced a new service. For a fixed annual fee, Damen will predict what are the most likely repair parts you will need for each of your cargo ships over the next year. It will then preposition those parts either on your ships or at Damen’s shipyards depending on whether your crew can install that part or it must be done at a shipyard. Then all you pay for is the installation labor you actually use each year, which also comes at a discounted rate. a) Specify the key features and benefits that they would want to inform customers about b) Develop an integrated marketing communication plan for marketing the service
A purchaser of a $100,000 single-family home for her family refuses to close escrow after making a $10,000 deposit. She is entitled to Group of answer choices $3,000. $7,000. $10,000. nothing
Consider the case where the left tail of the implied distribution is thinner than that of the log-normal distribution and the right tail of the implied distribution is fatter than that of the log-normal distribution with the same mean and standard deviation. Which of the following statements is correct? A) The implied volatility of a deep out-of-the money put is greater than the one obtained from the Black-Scholes price. B) The implied volatility decreases as the strike price increases. C) The implied volatility of a deep out-of-the money call is smaller than the one obtained from the Black-Scholes price. D) The implied volatility increases as the strike price increases. Please explain and justify your choice. In your answer, discuss the shape of the relation of implied volatility to the strike price and explain how this is obtained.
An automobile manufacturer offers a vehicle health monitoring (VHM) service for its vehicles. The VHM service is offered at a monthly price of $5.99 with a contribution margin of 75%. For customers who buy a subscription to the VHM service when purchasing their car, the annual retention rate is 80%. For customers who subscribe to the VHM service later, the annual retention rate is 60%. Assume a monthly retention cost of $0.50 and an annual discount rate of 14%. What is the effective monthly retention rate for customers who subscribe when buying their vehicle? % What is the effective monthly retention rate for customers who subscribe later? % What is the effective discount rate per month? % What is the CLV of a customer who subscribes when buying their vehicle? $ What is the CLV of a customer who subscribes later? $
Under the operating method, each rental receipt of the lessor is recorded as generally when payments are received, i.e., performance obligation is satisfied. The underlying leased asset is still recognized on the balance sheet of the lessor and In addition to , any other related costs to the lease arrangement, such as insurance, maintenance, taxes, etc. are recorded Under a sales-type lease, lessors report in the income statement, in the order of the sequence shown on the multiple-step income statement, and thus at commencement of the lease. During the lease term, is reported. on
1. Controls should be implemented to reduce risk to: A. zero B. the level at which management believes the risk benefit is less than its cost. C. the level of materiality specified by the external auditors. D. the level of materiality specified by the audit committee. 2. Financial risks A. decrease with time. B. are independent of time. C. cannot be controlled. D. are a function of variability.
A firm produces three products. Product A sells for $60; its variable costs are $20. Product B sells for $200; its variable costs are $120. Product C sells for $25; its variable costs are $10. Last year, the firm sold 1000 units of A 2000 units of B, and 10,000 units of C The firm has fixed costs of $320,000 per year. Calculate the break-even point of the firm.

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