Question
The monthly Toronto Maple Leaf fan magazines are printed one week prior to the start of sales for each monthly issue during the season. Attendance
The monthly Toronto Maple Leaf fan magazines are printed one week prior to the start of sales for each monthly issue during the season. Attendance averages 90 000 screaming and loyal Leafs fans during the life of each issue. Two-thirds of these fans usually buy the program, following a normal distribution, for $4 each. Unsold programs are sent to a recycling center that pays only 15 cents per program. The standard deviation is 4,500 programs, and the cost to print each program is $1.5.
Questions:-
1. What is the cost of underestimating demand for each program?
2. What is the overage cost per program?
3. How many programs should be ordered per game?
4. What is the stockout risk for this order size?
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