Better Essays

- 1300 Words
- 6 Pages

Problem 1

a. Using the function provided, the optimal stocking quantity, which maximizes expected profit, is approximately 584 newspapers. If 584 newspapers were to be ordered, Hamptonshire Express will net an expected profit of $331.436 per day.

b. Using the Newsvendor Formula in Excel, or Q* = Norminv(Cu/(Cu+Co), Mean, Std Dev) and the values:

Cu = 1 - .2 = .8

Co = .2

Mean = 500

Std Dev = 100

Q* = 584.1621 or 584 newspapers. This verifies the quantity in part (a).

Problem 2

a. Based on the simulation, Anna can should invest 4 hours daily in the creation of the profile section. It provides the highest profit of $371.33.

b. Marginal Cost = Marginal Benefit

10 = (.8*50)/(2*sqrt(h))

20sqrt(h) = 40

Sqrt(h) = 2

H = 4 hours, which verifies Sheen’s choice of effort in part (a).

Her effort is at the point where the marginal cost of spending the extra time to develop the profile section = marginal benefit of spending the extra time to develop the profile section; or the point where profit is maximized. If she spends the extra time to develop the profile section past where marginal cost = marginal benefit, she won’t be able to create enough demand for her newspaper, but if she spends less time than where marginal cost = marginal benefit, she won’t have a quality newspaper and misses out on additional sales, which leads to increased profits.

c. Comparison of the optimal profit with Problem 1 looks like this:

Stocking Quantity Daily Expected Profit

584 331.44

685 371.33

In this

Related

- Better Essays
## Bus 430 Assignment 2: Inventory Management

- 1369 Words
- 6 Pages

Evaluate the role their inventory plays in the company’s performance, operational efficiency, and customer satisfaction.

- 1369 Words
- 6 Pages

Better Essays - Decent Essays
## Specialty Toys Essay

- 607 Words
- 3 Pages

Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.

- 607 Words
- 3 Pages

Decent Essays - Decent Essays
## Hamptonshire Express Case Essay

- 636 Words
- 3 Pages

1. a. The simulation indicates that 584 is the optimum stocking quantity. Daily profit at this stocking quantity is $331.4346.

- 636 Words
- 3 Pages

Decent Essays - Decent Essays
## Case Study Specialty Toys Essay

- 654 Words
- 3 Pages

One of specialty’s managers felt that the profit potential was so great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios?

- 654 Words
- 3 Pages

Decent Essays - Decent Essays
## A3 5 AppliedStatistics

- 1136 Words
- 5 Pages

4. Calculate the following measures of central tendency for the set of cube measurement data. Show your work or explain your procedure for each.

- 1136 Words
- 5 Pages

Decent Essays - Better Essays
## Which Of The Following Payments Are Currently Deductible

- 3297 Words
- 14 Pages

II.|Connie has an investment portfolio in excess of $450,000. She pays Chris $350 to do an analysis of her investments and make recommendations on restructuring the portfolio.|

- 3297 Words
- 14 Pages

Better Essays - Decent Essays
## Questions: Community Hospital

- 606 Words
- 3 Pages

Provide detailed descriptions and show all calculations used to arrive at solutions for the following questions:

- 606 Words
- 3 Pages

Decent Essays - Better Essays
## Egt 1.1

- 1150 Words
- 5 Pages

The point of profit maximization for the firm in the given scenario occurs at a quantity of 8 units. At this point they have maximized their profit and as you can see to go beyond this point would cause the firm to incur economic losses.

- 1150 Words
- 5 Pages

Better Essays - Decent Essays
## Marginal Cost and Optimal Stocking Quantity

- 956 Words
- 4 Pages

The difference is due to the effect of Sheen’s effort on the demand. This relation is not surprising. Players in the different stages of a supply chain can increase demand for their product through efforts in advertisement, product development etc.

- 956 Words
- 4 Pages

Decent Essays - Good Essays
## Hamptonshire Express Essay

- 2159 Words
- 9 Pages

A. The simulated function given in the Excel spreadsheet “Hamptonshire Express: Problem_#1” allows the user to find the optimal quantity of newspapers to be stocked at the newly formed Hamptonshire Express Daily Newspaper. Anna Sheen estimated the daily demand of newspapers to be on a normal standard distribution; stating that daily demand will have a mean of 500 newspapers per day with a standard deviation of 100 newspapers per day. Using the function provided, the optimal stocking quantity, which maximizes expected profit, is determined to be approximately 584 newspapers. If 584 newspapers were to be ordered, Hamptonshire Express will net an

- 2159 Words
- 9 Pages

Good Essays - Better Essays
## Correlation Between Zinc And Copper Solutions

- 1403 Words
- 6 Pages

When all quantitative data has been collected and recorded, use the equation below to calculate the average electrical potential difference, or Average E_Cell of each variation of Copper Chloride.

- 1403 Words
- 6 Pages

Better Essays - Decent Essays
## Inventory and Costs

- 2187 Words
- 9 Pages

* High quality of whisky due to the unusual iron-free spring water used in the distillation process and the specially prepared fire-charred white oak barrels used in the aging process.

- 2187 Words
- 9 Pages

Decent Essays - Decent Essays
## Solution to Case Problem Specialty Toys Essay example

- 758 Words
- 4 Pages

5. From the information we get above, I would recommend an order quantity that can maximize the expected profit, and it can be calculated by the formula below: P(Demand<=Q) = C1/(C1+C2).

- 758 Words
- 4 Pages

Decent Essays - Decent Essays
## Red Brand Canners ‚Äì Case Study

- 968 Words
- 4 Pages

inconsistent. The Optimal Solution provided by us gives a profit of $53340 and includes a consistent mix

- 968 Words
- 4 Pages

Decent Essays - Decent Essays
## Assignment 2 : Inventory Management : Apple Inc.

- 1617 Words
- 7 Pages

Apple Inc. is a manufacturing company that produces and markets mobile and media devices, personal computers, and portable digital music players. In addition to these devices, they also sell a variety of software, services, peripherals, networking solutions, and third-party digital content and applications that can be accessed through the devices. Some of these popular devices that are manufactured and sold by the company include Macintosh computers, iPhones, iPods, and iPads. The Macintosh computer may be the most popular device that has been created by Apple. When it was released in 1984, it became the first computer to successfully use a Graphical User Interface. This allowed users to navigate the device by selecting pictures on the screen by using the click of a mouse. The success of this creation inspired the development of modern computers. It helped to launch the use of the Graphical User Interface that most modern-day computers use today.

- 1617 Words
- 7 Pages

Decent Essays