Question
Revisit the Lucy Lindner bookstore problem from HW1. Suppose we know that the demand for shirts during the season always varies between 400 to 600
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Revisit the Lucy Lindner bookstore problem from HW1. Suppose we know that the demand for shirts during the season always varies between 400 to 600 shirts. How does the average total profit vary as the order quantity varies from 400 to 600 shirts? Create a Jupyter Notebook using Python code to complete the appropriate analysis needed to answer this question. Generate a chart/graph of your results and include a text markdown cell in the notebook to document your verbal description of the results.
here is Lucy Lindner bookstore solution from HW1
Lucy Lindner's Bookstore | ||
Sales Price | $75 | |
Unit Cost | $50 | |
Salvage Price | $15 | |
Order Quantity | 600 | shirts |
Demand | 525 | shirts |
Shirts Sold | 525 | shirts |
Sales Revenue | $39,375 | |
Unsold Shirts | 75 | shirts |
Salvage Revenue | $1,125 | |
Total Revenue | $40,500 | |
Total Cost | $30,000 | |
Profit | $10,500 | |
Lucy Lindner bookstore from question 1:
2. Lucy Lindner owns a small campus bookstore that also sells sportswear. In February, she must place an order with Nike for a new UC football shirt for the coming season. The long lead time is required for the contract manufacturers in Asia to order the necessary materials and to begin production in April. The shirts will be delivered to Lucy in early August just in time for the new season. Nike will charge Lucy $50 for each shirt she orders, and she will sell each shirt for $75 during the season. There will not be another opportunity for Lucy to order any more shirts if she runs out. At the end of the season Lucy will sell all the shirts that are left at a price of $15. Obviously, Lucy doesnt know exactly what the demand for these shirts will be, but during the past few years she has sold an average of 500 shirts each season that are similar to the new shirt. Use an order quantity of 600 and a demand of 525 for your base case values. Construct a spreadsheet model to analyze Lucys decision.
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