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The Pantaloon is planning for its winter assortment in its fashion retail store. One order is to be placed at the beginning of the season.
The Pantaloon is planning for its winter assortment in its fashion retail store. One order is
to be placed at the beginning of the season. The demand forecast for one of its jackets is normal, with
a mean of and standard deviation of Each jacket is purchased for Rs and any
unsold jackets at the end of the season will be discounted and sold through the outlet store for Rs
At this price, virtually all jackets are expected to sell. It costs another Rs to store an unsold jacket
for the season and then move it to the outlet store. There is basic disagreement within the buying
committee on the effect of stocking out and the number of jackets to be ordered. One of the members
feels that jackets should be ordered, whereas another feels that jackets should be ordered.
At what cost of stocking out would each of the member's order size be justified?
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