Leah Sanchez is concerned that if she orders too few calendars, customers disappointment in not finding a

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Leah Sanchez is concerned that if she orders too few calendars, customers’ disappointment in not finding a calendar might drive them to shop elsewhere, resulting in more of a loss over the long term than just the $9.00 of lost profit on the calendar. Modify the model in Figure11.7 by adding a row that calculates unmet demand (number of calendars not sold, but could have been if a sufficient number were ordered). Assume Leah assigns $3.00 to each unmet-demand calendar as the additional opportunity cost due to future lost sales. For example, if Leah ordered 650 calendars and 700 are demanded, 50 calendars is the unmet demand and $150 is the additional opportunity cost. Incorporate this additional cost into your model. How many calendars would you recommend that Leah order based on this new model?
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Making Hard Decisions with decision tools

ISBN: 978-0538797573

3rd edition

Authors: Robert Clemen, Terence Reilly

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