Question
Zara is taking orders for summer dresses. Zara's available production capacity is 10,000 dresses, and it makes a margin of $25 for each dress sold.
Zara is taking orders for summer dresses. Zara's available production capacity is 10,000 dresses, and it makes a margin of $25 for each dress sold. Zara is currently taking orders from retailers and must decide on how many orders to commit to at this time. At the time of delivery, if Zara has orders that exceed capacity, it must arrange for backup capacity that results in a loss of $20 per dress. Retailers have been known to cancel their orders near the summer season as they have better visibility into expected demand.
How many orders should Zara accept if cancellations are normally distributed, with a mean of 1000 and a standard deviation of 500? How many orders should Zara accept if cancellations are normally distributed, with a mean of 10 percent of the orders accepted and a coefficient of variation of 0.25?
Please provide excel file along with the solution?
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