ute buy-back contract. For the seller, the cost of manufacturing a Ski-Jacket is $35 per unit. The buy-back price is $42/unit, and the fixed cost is $100000. For the buyer, the selling price is $95/Ski-Jacket, the purchase price is $55/Ski-Jacket and the purchase quantity is 15,000. The demand for the buyer follows a discrete distribution as given below: Demand Probability 12,000 0.071 13,000 0.071 14,000 0.143 15,000 0.143 16,000 0.214 17,000 0.07 18,000 0.143 19,000 0.145

Operations Research : Applications and Algorithms
4th Edition
ISBN:9780534380588
Author:Wayne L. Winston
Publisher:Wayne L. Winston
Chapter15: Deterministic Eoq Inventory Models
Section15.7: Multiple-product Eoq Models
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A buyer and seller execute buy-back contract.

For the seller, the cost of manufacturing a Ski-Jacket is $35 per unit. The buy-back price is $42/unit, and the fixed cost is $100000.

For the buyer, the selling price is $95/Ski-Jacket, the purchase price is $55/Ski-Jacket and the purchase quantity is 15,000.

The demand for the buyer follows a discrete distribution as given below:

Demand Probability
12,000 0.071
13,000 0.071
14,000 0.143
15,000 0.143
16,000 0.214
17,000 0.07
18,000 0.143
19,000 0.145

 

What is the expected supply chain profit?

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