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He Fashion Store sells fashion items. The demand for one selling season is random and unknown. The store must order inventory many months in advance
He Fashion Store sells fashion items. The demand for one selling season is random and unknown.
The store must order inventory many months in advance of the selling season to get a good price on the items and to ensure they arrive right before the selling season. Each unit costs Fashion $100.
These units are sold to customers for $250 per unit. Items not sold during the season can be sold to the outlet store at $80 per unit.
The store must order inventory many months in advance of the selling season to get a good price on the items and to ensure they arrive right before the selling season. Each unit costs Fashion $100.
These units are sold to customers for $250 per unit. Items not sold during the season can be sold to the outlet store at $80 per unit.
a. Based on the information above, is the optimal service level more or less than 50%? Provide your answer with a justification.
b. If the demand of the fashion items follows a normal distribution, then should the optimal order quantity be more or less than the mean of the demand of the fashion items? Provide your answer with a justification
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Optimal Service Level a The optimal service level for He Fashion Store is likely to be less than 50 Justification High holding costs Holding unsold in...Get Instant Access to Expert-Tailored Solutions
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