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A ski jacket manufacturer has outsourced production to a supplier in Asia. The electronics manufacturer sells three types of jackets a high - end, a
A ski jacket manufacturer has outsourced production to a supplier in Asia. The electronics
manufacturer sells three types of jackets a highend, a midrange and a lowend jacket. For the
upcoming winter season, the demand forecast for the highend jacket is normally distributed, with
a mean of and a standard deviation of the demand forecast for the midrange jacket has a
mean of and a standard deviation of and the demand forecast for the lowend jacket has
a mean of and a standard deviation of The highend jacket has a sale price of $ a
production cost of $ and a salvage value of $ The midrange jacket has a sale price of
$ a production cost of $ and a salvage value of $ The lowend jacket has a sale price of
$ a production cost of $ and a salvage value of $
i How many jackets of each type should the manufacturer order, if there are no capacity
constraints?
ii The supplier has available production capacity of only jackets. What is the
expected profit if the manufacturer orders high end jackets, midrange jackets
and low end jackets?
iii How many jackets of each type should the manufacturer order if the available capacity
is What is the expected profit?
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