You run a Pharmacy and have to decide how many packets of face masks to order for resale during this Corona virus pandemic period. You can only order in batches of 100. If only 100 batches are ordered, it will cost K10 per unit, if 200 or more, K9 per unit; and if 300 or more, it will cost K8.50 per unit. The results of a market survey you conducted show that the potential levels of demand are 100, 150, or 200; at 50%, 20%, and 10% probability, respectively. The selling price is K15 per unit and any stock unsold by the end of peak period for the pandemic will be sold for half the price. There is a cost of K0.55 per unit for any stock-outs experienced. Required: Using Microsoft Excel: Calculate the EMV of each alternative order level and the recommended order level. What is the net earnings at the recommended order level? Determine the order level at which net earnings are zero (breakeven order level).
You run a Pharmacy and have to decide how many packets of face masks to order for resale during this Corona virus pandemic period. You can only order in batches of 100. If only 100 batches are ordered, it will cost K10 per unit, if 200 or more, K9 per unit; and if 300 or more, it will cost K8.50 per unit. The results of a market survey you conducted show that the potential levels of demand are 100, 150, or 200; at 50%, 20%, and 10% probability, respectively. The selling price is K15 per unit and any stock unsold by the end of peak period for the pandemic will be sold for half the price. There is a cost of K0.55 per unit for any stock-outs experienced. Required: Using Microsoft Excel: Calculate the EMV of each alternative order level and the recommended order level. What is the net earnings at the recommended order level? Determine the order level at which net earnings are zero (breakeven order level).
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter6: Linear Systems
Section6.8: Linear Programming
Problem 5SC: If during the following year it is predicted that each comedy skit will generate 30 thousand and...
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You run a Pharmacy and have to decide how many packets of face masks to order for resale during this Corona virus pandemic period. You can only order in batches of 100. If only 100 batches are ordered, it will cost K10 per unit, if 200 or more, K9 per unit; and if 300 or more, it will cost K8.50 per unit.
The results of a market survey you conducted show that the potential levels of demand are 100, 150, or 200; at 50%, 20%, and 10% probability, respectively. The selling price is K15 per unit and any stock unsold by the end of peak period for the pandemic will be sold for half the price. There is a cost of K0.55 per unit for any stock-outs experienced.
Required:
Using Microsoft Excel:
- Calculate the EMV of each alternative order level and the recommended order level.
- What is the net earnings at the recommended order level?
- Determine the order level at which net earnings are zero (breakeven order level).
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