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U ur Restaurant in K z lay is trying to decide how many Turkish bagels ( simit ) to buy for Saturday morning to serve
Uur Restaurant in Kzlay is trying to decide how many Turkish bagels simit to buy for Saturday morning to serve for the breakfast. The bagels are purchased fresh in the morning from the supplier, Simit Factory SF Uur buys the bagels from Simit Factory for TLbagel and sells them for TLbagel between AM to : Noon, during the breakfast time. Unsold bagels are salvaged for TLbagel after : Noon. The unit production cost of Simit Factory is TLbagel Uur estimates that the demand for bagels on Saturday mornings is normally distributed with mean and standard deviation
a How many bagels should Uur order to maximize his expected profit? What is the expected profit of Uur
b How many bagels should Uur order to maximize the total supply chain profit?
Simit Factory is thinking of offering the following deal to Uur At the end of every day, the supplier will buy back the unsold bagels at a predetermined price of TLbagel Shipment cost is negligible.
c How many bagels should Uur order to maximize his expected profits given the buyback offer? What is the expected profit of Uur
d Assume the supplier is able on average to earn TL on each returned bagel. Given the order quantity in part c what is the suppliers expected profit?
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