You have just been hired to manage inventory for a sock company, "Sock-um." The company seems to be running out of inventory space. On day one of your job, you have been asked to determine average daily inventory. Every Monday, Sock-um receives a shipment of 500 cases of socks. Sock-um sells socks to retail outlets along the East Coast at a rate of 90 cases per day during each of the 5 business days (Monday through Friday). In your memo, please provide a model that represents daily inventory and provide your answer of average daily inventory. In your worksheets, demonstrate your knowledge of integrals and show how you can double check your answer through manual calculations. Sock-um has an annual contractual obligation with its manufacturer to receive 500 cases weekly, and breaking the contract would cost them $8000. Once inventory has reached 500 cases, Sock- um will run out of space. Currently, additional shelf space for 500 cases is $1000. A pair of socks costs $1 to manufacturer, and each pair sells for $4. There are 100 pair of socks in a case of socks. Sock-um has the possibility of expanding its reach to midwestern states by providing up to 20 cases per day. To do this, they will incur a one-time cost of $6000. Provide a marketing recommendation to Sock-um regarding the inventory constraints, contractual obligations, and sale opportunities in the Midwest.
You have just been hired to manage inventory for a sock company, "Sock-um." The company seems to be running out of inventory space. On day one of your job, you have been asked to determine average daily inventory. Every Monday, Sock-um receives a shipment of 500 cases of socks. Sock-um sells socks to retail outlets along the East Coast at a rate of 90 cases per day during each of the 5 business days (Monday through Friday). In your memo, please provide a model that represents daily inventory and provide your answer of average daily inventory. In your worksheets, demonstrate your knowledge of integrals and show how you can double check your answer through manual calculations. Sock-um has an annual contractual obligation with its manufacturer to receive 500 cases weekly, and breaking the contract would cost them $8000. Once inventory has reached 500 cases, Sock- um will run out of space. Currently, additional shelf space for 500 cases is $1000. A pair of socks costs $1 to manufacturer, and each pair sells for $4. There are 100 pair of socks in a case of socks. Sock-um has the possibility of expanding its reach to midwestern states by providing up to 20 cases per day. To do this, they will incur a one-time cost of $6000. Provide a marketing recommendation to Sock-um regarding the inventory constraints, contractual obligations, and sale opportunities in the Midwest.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Economics
You have just been hired to manage inventory for a sock company, "Sock-um." The company
seems to be running out of inventory space. On day one of your job, you have been asked to
determine average daily inventory. Every Monday, Sock-um receives a shipment of 500 cases of
socks. Sock-um sells socks to retail outlets along the East Coast at a rate of 90 cases per day
during each of the 5 business days (Monday through Friday). In your memo, please provide a
model that represents daily inventory and provide your answer of average daily inventory. In
your worksheets, demonstrate your knowledge of integrals and show how you can double check
your answer through manual calculations.
Sock-um has an annual contractual obligation with its manufacturer to receive 500 cases weekly,
and breaking the contract would cost them $8000. Once inventory has reached 500 cases, Sock-
um will run out of space. Currently, additional shelf space for 500 cases is $1000. A pair of
socks costs $1 to manufacturer, and each pair sells for $4. There are 100 pair of socks in a case
of socks. Sock-um has the possibility of expanding its reach to midwestern states by providing
up to 20 cases per day. To do this, they will incur a one-time cost of $6000. Provide a marketing
recommendation to Sock-um regarding the inventory constraints, contractual obligations, and
sale opportunities in the Midwest.
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