A B E F G 1 Question 5: The Green Company 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 The Green Company is a retailer of gourmet bottled pickles that purchases its products from Whole, a gourmet food manufacturer. Green buys units (from Whole) at a price of $15 per unit and sells them to customers at $45 per unit. Currently Whole produces to Green's order and delivers all requirements at the start of the period. Leftover inventory at the end of the season will be donated to a charity organization for free. The demand is lost when Green does not have inventory. Whole's production cost is $10 per unit. Given the current information, how many units of products should Green stock to satisfy demand? What is the associated profit for Whole and Green and for the supply chain in total? 19 Exp.Value Inventory Order Size= Sales Leftover Inventory Demand Probability Demand Satisfied Extra Inventory Shortage Deficient Inventory Cumulative Probability 100 200 300 400 2323 0.2 0.2 0.3 0.5 0.2 0.7 0.3 1 E[sales] E[left] E[short] 260 Exp. Demand Satisfied Exp. Extra Inventory Exp. Inventory Deficiency 20 21 22 Green's Selling Price per unit Green's Exp. Profit = 23 Green's purchase price per unit 24 Salvage Value per unit Possible Inventory Retailer Exp. Profit 25 $ - 26 Underage Cost cu= 100 $ 27 Overage Cost co= 200 $ 28 29 Critical Ratio= 30 300 $ - 400 $ -