Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dan McClure is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season for his

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed Dan McClure is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season for his bookstore. The book retails at \$43. The publisher sells the book to Dan for \$32. Dan will dispose of all of the unsold copies of the book at 75 percent off the retail price, at the end of the season. Dan estimates that demand for this book during the season is normal with a mean of 85 and a standard deviation of 43 . a. How many books should Dan order to maximize his expected profit? (Use the Round-up Rule in conjunction with the Standard Normal Distribution Function Table. Round your final answer to the nearest whole number.) b. Given the order quantity in part a, what is Dan's expected profit? (Round your final answer to the nearest whole number.) Answer is complete but not entirely correct. c. The publisher's variable cost per book is $10.80. Given the order quantity in part a, what is the publisher's expected profit? (Round your final answer to the nearest whole number.) The publisher is thinking of offering the following deal to Dan. At the end of the season, the publisher will buy back unsold copies at a predetermined price of $13.80. However, Dan would have to bear the costs of shipping unsold copies back to the publisher at $1.0 pe copy. d. How many books should Dan order to maximize his expected profits given the buy-back offer? (Use the Round-up Rule in conjunction with the Standard Normal Distribution Function Table. Round your final answer to the nearest whole number.) e. Given the order quantity in part d, what is Dan's expected profit? (Round your final answer to the nearest whole number.) f. Assume the publisher is able on average to earn $9.80 on each returned book net the publisher's handling costs (some books are destroyed while others are sold at a discount and others are sold at full price). Given the order quantity in part d, what is the publisher's expected profit? (Round your final answer to the nearest whole number.) g. Suppose the publisher continues to charge $32 per book and Dan still incurs a $1.0 cost to ship each book back to the publisher. What price should the publisher pay Dan for returned books to maximize the supply chain's profit (the sum of the publisher's profit and Dan's profit)? (Round your answer to two decimal places.)

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

General Management Processes And Action

Authors: David A. Garvin

1st Edition

0072432411, 978-0072432411

More Books

Students also viewed these General Management questions

Question

Sketch the surfaces. x 2 + z 2 = 1

Answered: 1 week ago

Question

Please complete without using excel

Answered: 1 week ago

Question

What are the ethical scrutiny requirements of your centre?

Answered: 1 week ago