Q4: Compute the projected profit for the order quantities suggested by the manag

Question

Q4: Compute the projected profit for the order quantities suggested by the management team under three scenarios: Worst case in which Demand 10,000 units, Most-Likely case in which Demand 20,000 units, and Best case in which Demand = 30,000 units. Hint: . For every order quantity Q, you need to build the tables below to answer this question. 15,000. To help you, these calculations are already done for you for Order quantity, Q . Total cost (Unit Cost)(Order Quantity) . Sales Revenue (at $24) -24 MIN(Demand, Order Quantity) .Sales Revenue (at $5)-5 Order Quantity-MIN(Demand, Order Quantity)] . Profit = Sales Revenue (at $24) + Sales Revenue (at $5)-Total Cost Order Quantity: 15,000 Sales Revenue Ats5 Demand Total Cost At $24 10,000 20,000 30,000 Profit 240,000 240,000 25,000 25,000 240,000 360,000 240,000360,000 120,000 120,000 0 Order Quanfity: 18,000 Sales Revenue Demand Total CostAt $24 At $5 Profit 10,000 20,000 30,000

Explanation / Answer

Solution

(1) Order Quantity : 18,000

From table 1 unit cost = total cost/order quantity = 240,000/15000 = 16

(2) Order quantity : 24,000

(3) Order quantity : 28,000

Demand Total cost At 24 At 5 Profit 10,000 288,000 240,000 40,000 -8,000 20,000 288,000 432,000 0 144,000 30,000 288,000 432,000 0 144,000

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.