Supply Chain ~ I need help with B,C and D.

A)

1. What is the unit cost of understocking? Cu = R - C $799 - $350 = $449

2. What is the unit cost of overstocking? Co = C-S $350 - 300 = $50

B) It costs $2,000,000 to place a change order. The change order will be effective from May 2023 when the product will be launched. Should AMP place a change order? Why or why not?

C)

1. What is the expected number of units that AMP sells every month?

2. The expected overstock quantity and the expected understock quantity are both positive? How can both the expected overstock quantity and the expected understock quantity both be positive?

D) It is now March 2023. Assume that you did not place the change order in Part b. Market Intelligence informs AMP that the demand for this model is going to be 110,000 per month. Market Intelligence forecasts are very accurate. You have already paid market Intelligence $2,000,000 as their consulting fees. It costs an additional $2,000,000 to place a change order. Assume that the holding costs are $10 per month per unit, for inventory on hand at the end of the month. Should you place a change order? Show your work clearly..

Let's assume that currently it is December 2022. Suppose you are managing the supply chain of AMP new wearable device. The device motivates the user to adopt a healthy lifestyle and reports it back automatically to the PCP and the insurance company. The new version of the watch will be launched at the end of April 2023. The stainless steel case model costs AMP $ 350 and will sell for $799 during the season." (The season will end when JnJ introduces the ultra-thin model at the Electronics Show in January 2024.) In other words, the selling season is eight months (May to December 2023). At the end of the season any leftover devices will be discounted and sold for $300. You have estimated that the demand for this model will be normally distributed with mean 100,000 per month with standard deviation of 20,000 per month. AMP has contracted with BOT to supply 120,000 units per month, starting from May 2023. Let's assume that currently it is December 2022. Suppose you are managing the supply chain of AMP new wearable device. The device motivates the user to adopt a healthy lifestyle and reports it back automatically to the PCP and the insurance company. The new version of the watch will be launched at the end of April 2023. The stainless steel case model costs AMP $ 350 and will sell for $799 during the season." (The season will end when JnJ introduces the ultra-thin model at the Electronics Show in January 2024.) In other words, the selling season is eight months (May to December 2023). At the end of the season any leftover devices will be discounted and sold for $300. You have estimated that the demand for this model will be normally distributed with mean 100,000 per month with standard deviation of 20,000 per month. AMP has contracted with BOT to supply 120,000 units per month, starting from May 2023