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I just need answer for following question question: Anna is now considering the implementation of a Revenue Sharing contract with Ralph. Assuming Anna's effort is
I just need answer for following question
question: Anna is now considering the implementation of a "Revenue Sharing" contract with Ralph. Assuming Anna's effort is equal to 4 hours (h=4), what shall be her wholesale price (w) if Ralph keeps 40% of the total revenue (and total profit)? Can this contract coordinate the supply chain?
whole case study attached
Hamptonshire Express Problem #1 Anna Sheen, upon graduating from a Boston-area university with a degree in journalism and operations research, returned to her hometown of Hamptonshire, Pennsylvania, to start a daily newspaper. The Hamptonshire Express emphasized local news, which Sheen believed was not adequately covered by big-city newspapers such as the The Philadelphia Inquirer, Pittsburgh Post-Gazette, and The New York Times. Working in leased space that cost approximately $10 per day, Sheen wrote stories and articles daily around news and feature material that she gathered from around town, and then typeset the newspaper using desktop software. A local printer printed the newspapers overnight at a marginal cost of $0.20 per copy. Anna sold the copies the following morning from 6 a.m. to 10 a.m. from a newsstand at the intersection of Main Street and Center Street in the center of Hamptonshire. Newsstand rental was $30 per day. Express was sold to consumers for $1 per copy. Copies not sold by 10 a.m. were discarded. Demand for newspapers was unpredictable; Sheen estimated demand daily before delivering the typeset paper to the printer. Based on data from similar entrepreneurial ventures and interviews with potential Hamptonshire customers, she estimated that daily demand for the Express was normally distributed with a mean of 500 and standard deviation of 100. a. How many newspapers should Sheen stock (i.e., order from the printer)? Use the simulation in the spreadsheet "Hamptonshire Express: Problem #1" to identify the optimal stocking quantity. What is the profit at this stocking quantity? b. Verify that the value derived in part (a) is consistent with the optimal stocking quantity in the Newsvendor model.
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