Solve as a newsvendor problem. There is no open inventory level. Only cakes could be saved for the next day. Hint: since newsvendor, there is no minimum inventory level. Think maximizing quantity instead. What is the expected weekly profit at each store? EXHIBIT 2: JUNE 2012 SALES VOLUME FOR SPECIALTY BUNS FOR ABERDEEN STORE AND JORDAN MTR STORE** EXHIBIT 3: AVERAGE SELLING PRICE AND AVERAGE PRODUCT COST** Average Selling Price Average Out-of-Factory Cost Specialty Buns HKD 7.80 HKD 3.12 June 1 2 3 3 4 5 6 7 ** Disguised data 8 9 EXHIBIT 1: TIME FOR PLACING ORDERS AND DELIVERY TIME 10 11 12 13 Category Jordan MTR Store 2.542 3,010 1.626 1,677 2,754 3,900 3.480 3,569 4.198 2.283 2,238 4,029 3,406 3,561 3,193 3,489 1,870 1,967 3,390 3,094 Order by Day of Week Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Delivery Time Aberdeen Store 966 1,047 927 952 1,033 1,315 1,219 1,232 1.399 1,216 1,216 1,388 1,230 1.250 1,145 1.213 1,034 1,083 1,222 1.118 1,292 1,128 1,044 1,007 901 1,107 1,140 1,231 1,272 Specialty Buns Sliced Loaf Bread 9:30 pm on first day First delivery on third day Specialty Cakes Large Cakes 4:00 pm on first day 9:30 pm on first day Second delivery on second day Third delivery on second day Source: Mui Chiu, district manager, Arome Bakery, interview by author, Hong Kong, 25 May 2012, 3,360 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3,109 2,912 1,938 1,571 3,046 3,206 3,554 3,808 Solve as a newsvendor problem. There is no open inventory level. Only cakes could be saved for the next day. Hint: since newsvendor, there is no minimum inventory level. Think maximizing quantity instead. What is the expected weekly profit at each store? EXHIBIT 2: JUNE 2012 SALES VOLUME FOR SPECIALTY BUNS FOR ABERDEEN STORE AND JORDAN MTR STORE** EXHIBIT 3: AVERAGE SELLING PRICE AND AVERAGE PRODUCT COST** Average Selling Price Average Out-of-Factory Cost Specialty Buns HKD 7.80 HKD 3.12 June 1 2 3 3 4 5 6 7 ** Disguised data 8 9 EXHIBIT 1: TIME FOR PLACING ORDERS AND DELIVERY TIME 10 11 12 13 Category Jordan MTR Store 2.542 3,010 1.626 1,677 2,754 3,900 3.480 3,569 4.198 2.283 2,238 4,029 3,406 3,561 3,193 3,489 1,870 1,967 3,390 3,094 Order by Day of Week Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Delivery Time Aberdeen Store 966 1,047 927 952 1,033 1,315 1,219 1,232 1.399 1,216 1,216 1,388 1,230 1.250 1,145 1.213 1,034 1,083 1,222 1.118 1,292 1,128 1,044 1,007 901 1,107 1,140 1,231 1,272 Specialty Buns Sliced Loaf Bread 9:30 pm on first day First delivery on third day Specialty Cakes Large Cakes 4:00 pm on first day 9:30 pm on first day Second delivery on second day Third delivery on second day Source: Mui Chiu, district manager, Arome Bakery, interview by author, Hong Kong, 25 May 2012, 3,360 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3,109 2,912 1,938 1,571 3,046 3,206 3,554 3,808
