Big Sal, the third generation owner and CEO of Mattera Motors, is a huge Philadelphia Phillies fan In fact, the vast majority of his employees are also Phillies fans, to varying degrees Each baseball season Big Sal buys a selection of Phillies memorabilia from Brians Sports Collectibles and makes the items available in the company store For the coming season, he has put several of his top empoyees to work developing forecasts for this seasons items Shown below are the costs, selling prices, and demand forecasts for the five items Big Sal will order There are five individual forecasts for each model, and the means and standard deviations of the forecasts are also shown forecasters Model Cost Selling Price Scooter PeeWee Babe Stretch Hawk Phillie Phanatic bobblehead $18 $30 350 475 400 575 300 420 108 Phillies Pint Glasses (set of 4) $15 $40 625 550 700 750 450 615 119 Phillies travel mug $14 $35 400 275 350 175 425 325 102 Phillies sports watch $9 $25 775 825 800 750 900 810 58 Phillies lawn chair $11 $20 850 790 890 900 720 830 75 Totals 3000 Assume that any items left over in September will be sold to a discount retailer for 30 of the selling price shown above Big Sal will place one order with the distributor prior to the start of the selling season, and will be able to place a replenishment order around the beginning of May Apply the Accurate Response methodology described in the Product Life Cycle Inventory Management video to answer the two questions below Calculate Big Sals initial order quantities for each style using the newsvendor approach You can find the newsvendor quantity for each item overall (i e , using demand data for the entire season) and divide it by two Note that your order quantities will not sum to exactly 1,500 Now, you must adjust the order quantities for the five models so that their sum is exactly 1,500 for the initial order Recommend order quantities for each model Be sure to clearly show how you arrived at your recommended order quantities Explain your reasoning Please note that there is no one exact answer for this problem

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Big Sal, the third generation owner and CEO of Mattera Motors, is a huge Philadelphia Phillies fan. In fact, the vast majority of his employees

Big Sal, the third generation owner and CEO of Mattera Motors, is a huge Philadelphia Phillies fan. In fact, the vast majority of his employees are also Phillies fans, to varying degrees. Each baseball season Big Sal buys a selection of Phillies memorabilia from Brians Sports Collectibles and makes the items available in the company store. For the coming season, he has put several of his top empoyees to work developing forecasts for this seasons items. Shown below are the costs, selling prices, and demand forecasts for the five items Big Sal will order. There are five individual forecasts for each model, and the means and standard deviations of the forecasts are also shown.

			forecasters
Model	Cost	Selling Price	Scooter	PeeWee	Babe	Stretch	Hawk
Phillie Phanatic bobblehead	$18	$30	350	475	400	575	300	420	108
Phillies Pint Glasses (set of 4)	$15	$40	625	550	700	750	450	615	119
Phillies travel mug	$14	$35	400	275	350	175	425	325	102
Phillies sports watch	$9	$25	775	825	800	750	900	810	58
Phillies lawn chair	$11	$20	850	790	890	900	720	830	75
Totals								3000

Assume that any items left over in September will be sold to a discount retailer for 30% of the selling price shown above. Big Sal will place one order with the distributor prior to the start of the selling season, and will be able to place a replenishment order around the beginning of May. Apply the Accurate Response methodology described in the Product Life Cycle Inventory Management video to answer the two questions below.

Calculate Big Sals initial order quantities for each style using the newsvendor approach. You can find the newsvendor quantity for each item overall (i.e., using demand data for the entire season) and divide it by two. Note that your order quantities will not sum to exactly 1,500.
Now, you must adjust the order quantities for the five models so that their sum is exactly 1,500 for the initial order. Recommend order quantities for each model. Be sure to clearly show how you arrived at your recommended order quantities. Explain your reasoning. Please note that there is no one exact answer for this problem.