The work has not been graded but I like the output that was submitted to me. Is it possible for the same prof to do the next assignment I will be submitting? If possible, I will greatly appreciate it.
Dan’s Independent Book Store is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season. The publisher produces the book at the cost of $16 per unit and sells it to Dan at $20. The book retails at $28. Dan will dispose of all of the unsold copies of the book at 50% off the retail price, at the end of the season. Dan estimates that demand for this book during the season is Normal with a mean of 1000 and a standard deviation of 250.
a. What is the quantity that Dan should order to maximize his expected profit? (part b and c??)
ANS: 1045 copies
underage cost, Cu= 28-20=8
overage cost, Co-20-28/2=6
critical ratio= Cu/(Cu+Co) =8/14 =0.5714
b. Imagine the integrated supply chain where the publisher and Dan make decisions as if they are in a single firm. What is the quantity that the integrated firm should order to maximize their expected profit? (20 points)
c. The optimal order quantity in part b can be considered as the first-best solution for the supply chain. However, Dan found the integration with the publisher is not possible due to other financial issues. Alternatively, Dan is thinking of offering the following scheme to the publisher. At the end of the season, the publisher will buy back unsold copies at a pre-determined price of $r. How should Dan set the return price $r so that the optimal order quantity under this scheme is equal to the first-best solution in part b?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more