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1. You are a retailer of computer systems. You buy computer system curved monitors directly from the manufacturer who sells these monitors to you for
1. You are a retailer of computer systems. You buy computer system curved monitors directly from the manufacturer who sells these monitors to you for $110 per unit and your retail selling price is $150 per unit. The manufacturer's cost is $80 per unit. The manufacturer offers you two alternatives: buyback or revenue sharing. The demand distribution is given below: Demand Probability 100 0.10 0.20 300 0.40 400 0.20 500 0.10 a. Buyback option: You still buy monitors for $110 per unit and sell for $150 per unit. However, the manufacturer buys back unsold monitors from you at for $90 per unit. 200 a. Compute the retailer's Expected profits for an order size of 300 monitors. (10) b. Compute the manufacturer's expected profits for an order size of 300 monitors. (10) c. Compute the supply chain expected profit for an order size of 300 monitors. (5) Revenue sharing: In order to save initial purchase cost, you as a retailer, agrees to share 10% of your revenue with the manufacturer who has agreed to sell monitors to you at a lower cost of $100 per unit rather than at $ 110 per unit. d. Compute the retailer's expected profit for an order size of 300 monitors. (10) e. Compute the manufacturer's expected profits for an order size of 300 monitors. (10) f. Compute the supply chain expected profits for an order size of 300 units
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