A buyer for a large sporting goods store chain must place orders for professional footballs with the football manufacturer six months prior to the time the footballs will be sold in the stores. The buyer must decide in November how many footballs to order for sale during the upcoming late summer and fall months. Assume that each football costs the chain $45. Furthermore, assume that each can be sold for a retail price of $90. If the footballs are still on the shelves after next Christmas, they can be discounted and sold for $35 each. The probability distribution of consumer demand for these footballs (in hundreds) during the upcoming season has been assessed by the market research specialists and is presented below. Finally, assume that the sporting goods store chain must purchase the footballs in lots of 100 units. Demand Probability 4 0.30 5 0.50 6 0.20 a) Construct a decision tree to identify the buyer’s course of action that maximizes the expected profit earned by the chain from the purchase and subsequent sale of footballs in the coming year. b) What is the optimal strategy for order quantity, and what is the expected profit in that case?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
2) A buyer for a large sporting goods store chain must place orders for professional footballs with the football
manufacturer six months prior to the time the footballs will be sold in the stores. The buyer must decide
in November how many footballs to order for sale during the upcoming late summer and fall months.
Assume that each football costs the chain $45. Furthermore, assume that each can be sold for a retail price
of $90. If the footballs are still on the shelves after next Christmas, they can be discounted and sold for
$35 each. The probability distribution of consumer demand for these footballs (in hundreds) during the
upcoming season has been assessed by the
assume that the sporting goods store chain must purchase the footballs in lots of 100 units.
Demand Probability
4 0.30
5 0.50
6 0.20
a) Construct a decision tree to identify the buyer’s course of action that maximizes the expected profit
earned by the chain from the purchase and subsequent sale of footballs in the coming year.
b) What is the optimal strategy for order quantity, and what is the expected profit in that case?
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