1-ifyou were halibut how many pounds of strawberries would you stock? determine the optimal stocking quantity?
Page 2 Problam 4 After a year of operations, expected wreekly demand remained at and the standard deviation of weekly demand at As in Problemi \#3, Halbut retailed strawberries at trom Quenen at \$1.05 per ibs. Halibut was responsible for unsold strawbernes. Having virfually no competition from other farmer's market stands and being firmly established at the farmer's market, Halibut broadened the product line to include newspapers and magazines. He became friendly with the customers and regulars. Inspired by the success of strawberry sales, Halbut decided to include blueberries to his portfolio at the farmer's market stand. Halbut lived wery close to the farmer's market and was growing blieberries in his large yard, 50 , he didn't need to stock and imentory of blueberries, and, it a customer demanded blueberries, he could go & pick them from his yard and bring them in no time. Marginal cost to pick and transport the blueberries wir. $0.70 per pound, and the blueberries retalled for 50.95 per lbs. Queen believed blueberries posed no threst to her strawbeenies, since they were grown on a yard with no special attention to them during the time they grew. Halibut agreed that customers wouldn't choose blueberries over strawberries, but he reaited that he frequently stocked out of strawberties. He estimated that approximately 30,004s of the customers whio experienced a stockout from strawberries would buy blueberries. The other 70.007 would not buy berries at the stand that week. a. If you were Halibut, how many pounds of strawberries wou'd you stock? Use spreadiheet "Farmer's Market Straviberries Problem B4" to determine the ootimal. stocking quantity ithe spreadsheet calculates h to maximize Queens profits for the givan wholesaie price). Compare your stocking decision with the optirsal c. Halibut 's stand was constrained for space as he continued to add new products. To get a better idea of the true profitability for each product, he decided to allocate the cost of real estate according to space occupied by each product. If he figured weekly real estate costs for each additional lbs at approximately $0.02 how would this impact his stocking decision? Why? Page 2 Problam 4 After a year of operations, expected wreekly demand remained at and the standard deviation of weekly demand at As in Problemi \#3, Halbut retailed strawberries at trom Quenen at \$1.05 per ibs. Halibut was responsible for unsold strawbernes. Having virfually no competition from other farmer's market stands and being firmly established at the farmer's market, Halibut broadened the product line to include newspapers and magazines. He became friendly with the customers and regulars. Inspired by the success of strawberry sales, Halbut decided to include blueberries to his portfolio at the farmer's market stand. Halbut lived wery close to the farmer's market and was growing blieberries in his large yard, 50 , he didn't need to stock and imentory of blueberries, and, it a customer demanded blueberries, he could go & pick them from his yard and bring them in no time. Marginal cost to pick and transport the blueberries wir. $0.70 per pound, and the blueberries retalled for 50.95 per lbs. Queen believed blueberries posed no threst to her strawbeenies, since they were grown on a yard with no special attention to them during the time they grew. Halibut agreed that customers wouldn't choose blueberries over strawberries, but he reaited that he frequently stocked out of strawberties. He estimated that approximately 30,004s of the customers whio experienced a stockout from strawberries would buy blueberries. The other 70.007 would not buy berries at the stand that week. a. If you were Halibut, how many pounds of strawberries wou'd you stock? Use spreadiheet "Farmer's Market Straviberries Problem B4" to determine the ootimal. stocking quantity ithe spreadsheet calculates h to maximize Queens profits for the givan wholesaie price). Compare your stocking decision with the optirsal c. Halibut 's stand was constrained for space as he continued to add new products. To get a better idea of the true profitability for each product, he decided to allocate the cost of real estate according to space occupied by each product. If he figured weekly real estate costs for each additional lbs at approximately $0.02 how would this impact his stocking decision? Why
