Company A is exploring a new business opportunity: selling custom screen-printed sweatshirts for college football bowl games. Company A is trying to determine how many sweatshirts to produce for the upcoming Tangerine Bowl game. During the month before the game, Company A plans to sell their sweatshirts for $30 each. At this price, they believe the demand for sweatshirts will be uniformly distributed between 5,000 and 15,000. One month after the game, Company A plans to sell any remaining sweatshirts to the local TJ Maxx and Marshalls outlets for $12 each. At this price, Company A believes they will be able to sell either 500 units with probability 30%, or 750 units with probability 40% or 1000 units with probability 30%. Any remaining sweatshirts will be donated to a local charity. Company A can order custom screen-printed sweatshirts for $10 per sweatshirt in lot sizes of 200. Use simulation modeling to answer the following questions. (a) Determine the average profit that Company A would earn if she orders 10,000 sweatshirts. (b) How many sweatshirts would you recommend Company A order to maximize expected profit? (c) Due to an outbreak of a novel infectious disease, Governor Hogan has announced that there is a 50% chance that all sport events will now be held without a live audience. If that happens, you will not be able to sell any sweatshirts for $30, and instead will only be able to sell to TJ Maxx and Marshalls, (in the same quantity as in the original problem formulation). How many sweatshirts would you recommend Company A order to maximize average profit? Is the venture still profitable? Company A is exploring a new business opportunity: selling custom screen-printed sweatshirts for college football bowl games. Company A is trying to determine how many sweatshirts to produce for the upcoming Tangerine Bowl game. During the month before the game, Company A plans to sell their sweatshirts for $30 each. At this price, they believe the demand for sweatshirts will be uniformly distributed between 5,000 and 15,000. One month after the game, Company A plans to sell any remaining sweatshirts to the local TJ Maxx and Marshalls outlets for $12 each. At this price, Company A believes they will be able to sell either 500 units with probability 30%, or 750 units with probability 40% or 1000 units with probability 30%. Any remaining sweatshirts will be donated to a local charity. Company A can order custom screen-printed sweatshirts for $10 per sweatshirt in lot sizes of 200. Use simulation modeling to answer the following questions. (a) Determine the average profit that Company A would earn if she orders 10,000 sweatshirts. (b) How many sweatshirts would you recommend Company A order to maximize expected profit? (c) Due to an outbreak of a novel infectious disease, Governor Hogan has announced that there is a 50% chance that all sport events will now be held without a live audience. If that happens, you will not be able to sell any sweatshirts for $30, and instead will only be able to sell to TJ Maxx and Marshalls, (in the same quantity as in the original problem formulation). How many sweatshirts would you recommend Company A order to maximize average profit? Is the venture still profitable
