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mand) demand 6.000 8.000

mand) demand 6.000 8.000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Reference: Chapter 2 Inventory management & Risk Pooling ge Based upon the reference chapter and class discussions, solve the following problem The probabilistic forecast for a textile retail product is given in Table 1. Prob (demand) demand 6.000 8.000 10 % 15 % 30 % 10.000 12.000 14.000 25 % 15 % 5 % 16.000 The costs associated with the product are $ 50.000 $ 80 Fixed order cost is - Unit purchasing cost is The revenues associated with the product are - Sales price during season - Discount price after season is $33 $ 120 Questions. 1. Calculate and plot the average profit against purchase quantities (with purchase lot size of 1,000 units) 2. What is the optimal purchasing quantity that maximizes expected profit ? 3. What is the profit value for optimum purchasing quantity ?
Transcribed Image Text:Reference: Chapter 2 Inventory management & Risk Pooling ge Based upon the reference chapter and class discussions, solve the following problem The probabilistic forecast for a textile retail product is given in Table 1. Prob (demand) demand 6.000 8.000 10 % 15 % 30 % 10.000 12.000 14.000 25 % 15 % 5 % 16.000 The costs associated with the product are $ 50.000 $ 80 Fixed order cost is - Unit purchasing cost is The revenues associated with the product are - Sales price during season - Discount price after season is $33 $ 120 Questions. 1. Calculate and plot the average profit against purchase quantities (with purchase lot size of 1,000 units) 2. What is the optimal purchasing quantity that maximizes expected profit ? 3. What is the profit value for optimum purchasing quantity ?
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