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Question 1. Suppose you operate a brick-and-mortar store specializing in apparel, especially denim (or jean). Table 1 presents store-SKU sales over the last six months

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Question 1. Suppose you operate a brick-and-mortar store specializing in apparel, especially denim (or jean). Table 1 presents store-SKU sales over the last six months of 2019. You are currently carrying fifty-two out of the one hundred-two possible brand-size-type combinations (two brands (Mavi and Levi's) x three sizes (27,28, and 29) x seventeen types = one hundred two varieties). As a capacity limitation, you cannot carry more than fifty-two SKUs in the denim assortment. Also, assume that the probability of substitution across types and sizes is zero. Answer the questions below according to the information provided in Table 1. Part A. Prices of each SKU vary slightly across the different types and two brands within a size, but for simplicity, we neglect price variations across types and use the average prices for Mavi and Levi's of 900TL and 1050TL. Calculate the revenue generated by the current assortment. Part B. In the absence of substitution across the different types, brands, and sizes, how would you estimate demand for all brand-size types? Determine the first-five revenue maximizing SKUs without considering substitution across the different types, brands, and sizes. Part C. Substitution behavior across types and sizes is not possible. However, consumers substitute another brand within each size if they do not find what they initially plan to purchase. Predict the likelihood of substitution between Mavi and Levi's for each size, respectively. Part D. Estimate the demand for each SKU by incorporating the probabilities of substitution between brands you have found in Part C. Part E. What is the fraction of total demand captured for each type? Part F. In the presence of substitution, determine the first-two revenue maximizing SKUs. Part G. What is the impact of considering substitution probabilities among brands regarding the revenue generated by the first-two revenue maximizing SKUs

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