A manufacturer of industrial sales has production capacity of 1,000 units per day. Currently, the firm sells production capacity for $10 per unit. At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay $15 per unit if capacity was available on the last day. About ten days in advance, demand for the high-price segment is normally distributed with a mean of 250 and a standard deviation of 100. How much production capacity should the manufacturer reserve for the last day? Show the answer clearly.
A manufacturer of industrial sales has production capacity of 1,000 units per day. Currently, the firm sells production capacity for $10 per unit. At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay $15 per unit if capacity was available on the last day. About ten days in advance, demand for the high-price segment is normally distributed with a mean of 250 and a standard deviation of 100. How much production capacity should the manufacturer reserve for the last day? Show the answer clearly.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter10: Introduction To Simulation Modeling
Section10.5: Introduction To @risk
Problem 20P: Use @RISK to analyze the sweatshirt situation in Problem 14 of the previous section. Do this for the...
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A manufacturer of industrial sales has production capacity of 1,000 units
per day. Currently, the firm sells production capacity for $10 per unit. At this price,
all production capacity gets booked about one week in advance. A group of customers
have said that they would be willing to pay $15 per unit if capacity was available on
the last day. About ten days in advance, demand for the high-price segment is
normally distributed with a mean of 250 and a standard deviation of 100. How much
production capacity should the manufacturer reserve for the last day? Show the
answer clearly.
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