Consider a distributor of a seasonal item that maintains 2, Ask an Expert

Management Studies

Consider a distributor of a seasonal item that maintains 2 regional warehouses. Demand at each warehouse is affected by local market conditions, which can either be excellent (E), good (G), or poor (P). Each scenario is equally likely. Under scenario E, demand during the selling season is 300; under scenario G, demand is 200; and under scenario P, demand is 100. The distributor purchases each unit at a cost of $100, resells it at $150 and disposes of unsold units at $50.

a) What is the optimal order quantity for the distributor at each warehouse? What is the total expected profit generated by the distributor?

b) The distributor is considering consolidating the two warehouses into a single one. If local market conditions at the warehouses are independent, what would be the additional profit realized by the distributor.

c) What would be the additional profit (generated from consolidation) if market conditions are always the same at both warehouses?

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92241535

Have any Question?Write your Review or question?

Related Questions in Operation Management

Share with the class why you have selected these metrics

Share with the class why you have selected these metrics, AND be sure to describe how you will gather data for the metrics. Select three metrics that you will use in your final paper to measure the effectiveness of the H ...

Carole smith an apostolic christian worked as sales

Carole Smith, an Apostolic Christian, worked as sales associate at Nickels Department Store. One afternoon, during a break, Smith participated in a conversation about God, homosexuality, and same-sex marriages. The next ...

You were just appointed to a management position one of

You were just appointed to a management position. One of your first tasks is to review all of the employees in your department and assess their performance. It is your understanding there are two employees who need to be ...

Using the company you selected for the week 3 learning

Using the company you selected for the Week 3 Learning Activity (Kroger or Nike), it is now time to evaluate the strengths, weaknesses, opportunities and threats you uncovered and determine what strategy is best suited b ...

Hyperone is the first fully egyptian combined

Hyperone is the first fully Egyptian, combined hypermarket-department store in the country, covering 40,000 square meters in the Sheikh Zayed District, a suburb of Cairo. Established in 2005, the chain's success speaks f ...

I need an informative speech about convenience stores are

I need an informative speech? about Convenience stores are different than gas stations. Minimum of 3 research sources. A speaking outline is to be developed from the preparation outline. The speech is to be delivered fro ...

The employee credit union at state university is planning

The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securit ...

Using breakdown formula solve thiseric wants to start a car

Using Breakdown formula solve this. Eric wants to start a car detailing business but is unsure how many cars he will need to detail before making a profit. His cousin has offered to let him use a small section of his sho ...

What are some examples of age discrimination under the age

What are some examples of age discrimination under the Age Discrimination Employment Act? Discuss when age can be a bona fide occupational qualification (BFOQ). As the head of Human Resources, what recommendations would ...

Assignment details creating formative and summative

Assignment Details : Creating Formative and Summative Assessments The goal of this Assignment is to develop one formative and one summative assessment in your content area. You will complete this Assignment in two steps. ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Operation Management Expert