Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

27 PA 13-4 (Algo) Fashionables is a franchisee of The UnLimited, the.... Fashionables is a franchisee of The UnLimited, the well-known retailer of fashionable

image text in transcribedimage text in transcribed

27 PA 13-4 (Algo) Fashionables is a franchisee of The UnLimited, the.... Fashionables is a franchisee of The UnLimited, the well-known retailer of fashionable clothing. Prior to the winter season, The Unlimited offers Fashionables the choice of five different colors of a particular sweater design. The sweaters are knit overseas by hand; because of the lead times involved, Fashionables will need to order its assortment in advance of the selling season. As per the contracting terms offered by The UnLimited, Fashionables will also not be able to cancel, modify, or reorder sweaters during the selling season. Demand for each color during the season is normally distributed with a mean of 500 and a standard deviation of 225. Further, you may assume that the demands for each sweater are independent of those for a different color. Use Table 13.4. The Unlimited offers the sweaters to Fashionables at the wholesale price of $45 per sweater, and Fashionables plans to sell each sweater at the retail price of $74 per unit. The UnLimited does not accept any returns of unsold inventory. However, Fashionables can sell all of the unsold sweaters at the end of the season at the fire-sale price of $25 each. Note: If a part of the question specifies whether to use Table 13.4, or to use Excel, then credit for a correct answer will depend on using the specified method. a. How many units of each sweater type should Fashionables order to maximize its expected profit? Use Table 13.4. Note: Round your answer to the nearest whole number. Number of units b. If Fashionables wishes to ensure a 97.5 percent in-stock probability, what should its order quantity be for each type of sweater? Use Table 13.4. Note: Round your answer to the nearest whole number. Order quantity c. Say Fashionables orders 650 of each sweater. What is Fashionables' expected profit for all five sweater colors? Use Table 13.4. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Expected profit d. Say Fashionables orders 650 of each sweater. What is the stockout probability for each sweater? Use Excel. Note: Round your answer to 4 decimal places. Stockout probability

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Comparative international accounting

Authors: Christopher nobes, Robert parker

9th Edition

273703579, 978-0273703570

More Books

Students also viewed these Accounting questions