a) calculate the weekly revenue level that each product generates b) calculate the average revenue level that the firm loses from each product c) suppose you replenish these products every week (52 weeks in a year). based on the table below, determkne tbe optimal instock rate the firm should have for each product
a) calculate the weekly revenue level that each product generates b) calculate the average revenue level that the firm loses from each product c) suppose you replenish these products every week (52 weeks in a year). based on the table below, determkne tbe optimal instock rate the firm should have for each product
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
a) calculate the weekly revenue level that each product generates
b) calculate the average revenue level that the firm loses from each product
c) suppose you replenish these products every week (52 weeks in a year). based on the table below, determkne tbe optimal instock rate the firm should have for each product
Transcribed Image Text:FAS
As a manager of a chain of local supermarkets in the Tuzla district, you carefully
observe the stock performance of products A, B, C, D, and E that earn you an edge
over your competitors. You do not want to run out of these items, as this would cause
lost revenue. You are extending these products to the market at five stores, denoted
by S1, S2, S3, S4, and S5. Average In-stock rates belonging to each product are given
by:
Average
In-stock Rate
Price
($ per unit)
Weekly
Demand
A
(units)
99%
Table 1- Average In-stock Rates
C
B
95%
1000
Besides, the list price levels and the weekly demand values for each product are
presented in Table 2.
85%
10
Table 2 Regular Price and Weekly Demand Levels
-
A
B
C
D
900
D
20
97%
1200
5
E
100
75%
E
40
300
e level that each product generates.
ge
ng
Transcribed Image Text:unit holding cost
($ per year)
A
1
Table 3 Unit holding cost values per year
-
B
2
C
5
D
3
E
1
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