n7TipTop Snowboards in Beech Mountain, NC sell a popular snowboard during the winter ski season. The anticipateddemand is normally distributed with a mean of 731 units and standard deviation of 431 units. Tiptop purchases thesnowboard from the manufacturer for $217 and sells the snowboard for $395. Any unsold snowboards at the end of skiseason will be sold on clearance for $189. It costs $23 to hold a unit in inventory for the entire ski season.Quizut ofFinRound all entries to one decimal place (nearest tenth). Enter probabilities and percent changes as percentages roundedto nearest tenth of a percent (e.g. 0.7146 should be entered as 71.6%)a) Compute the optimal number of units that TipTop should order:units.b) Compute the probability of a stockout given the optimal order quantity, i.e. that demand exceeds the order quantity.c) Compute the optimal expected profit associated with the order quantity from part (a): $d) Given the optimal order quantity, how many units does TipTop expect to sell on clearance (on average)?units.Suppose that Tip Top's supplier is willing to offer a rush production and shipping option which will allow TipTop a secondorder opportunity. This will allow Tip Top to assess the winter ski season and order more snowboards if necessary oncethey observe the demand. However, to offset the cost of the flexible capacity investment, the supplier will charge $226for units ordered in the second order.units.e) Compute the optimal order quantity for the initial order:f) Compute the new optimal expected profit: $%.g) Compute the percent increase in profits for Tiptop if using the quick response option:

The anticipated demand is normally distributed with mean =731 units and standard deviation =431…

Answered: TipTop Snowboards in Beech Mountain, NC…

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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Consider the requirement that shopping malls need a license to remain open 24 hours, where these licenses are in fixed supply. These licenses are however freely tradable among actual and potential owners, and the industry is perfectly competitive. If the average 24-hour shopping mall’s annual revenue is $250,000, while the licenses may be leased at an annual fee of $100,000. Given this information, average variable cost for the industry would be $100,000. Is the preceding statement true or false?
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Bigby Riggs sells high-end art frames that are ordered every Thursday to prepare for next week's demand. The most popular frame style is sold at $50 per unit and it costs Bigby $35 per piece. If too many art frames are ordered, Bigby incurs an inventory carrying cost of $2 per frame. If Bigby runs out of stock for the week, he forgoes the profits from missed sales. Bigby has the option to order 100, 150, or 200 art frames to meet next week's demand which can be either 100, 150, or 200 frames. Based on historical demand, Bigby has determined the following probability information: P(100) = 0.4, P(150) = 0.3, P(200) = 0.3 What is the Expected Monetary Value of your best alternative?
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