a) By changing the order policy from \"Order to Forecast\" to \"Order to meet de
ID: 372843 • Letter: A
Question
a) By changing the order policy from "Order to Forecast" to "Order to meet demand exactly", the supplier purchases quantity exactly equal to demand (having perfect information about demand). So profit = (Selling price - Cost)*demand
Expected Profit WITH Perfect Information = 126*0.0286 + 129*0.0857 + 132*0.1143 + 135*0.1429 + 138*0.2 + 141*0.1714 + 144*0.1429 + 147*0.0857 + 150*0.0286 = $ 138.27
b) Under "With Perfect Information" scenario, there is no surplus inventory, so it does not affect if the value of surpusinventory drops.
However, in case of "without Perfect Information" the optimal purchase quantity will decrease if discount price drops.
Explanation / Answer
A) What is the Expected outcome with "Perfect Information" once the supplier changes from a "Order to Forecast" to an "Order to Meet Demand Exactly" policy, where the customer needs to place the order in advance? (Value of WITH Perfect Information.) Enter your results rounded to the nearest penny. Do not include the "$" sign.
B) What happens if the value of the surplus inventory drops slightly (discount price decreases)?
Demand 123.00 11 Data 126.00S126.00 $126.00 $128.69 S130.43 $130.91 $129.83 S126.54 $121.37 $114.63 $106.94 S 129.00 S 129.00 S 129.00 S 110,00 S12100 S13200 1200 13200 $13200 S132 00 13200 S132 45 $102.00 $113.00 $124.00 $135.00 $135.00 $135.00 $135.00 135.00 $135.00 S 15.00 94.00 $105.00 116.00 S86.00 S97.00 S108.00 $119.00 S 130.00 $141.00 $141.00 S 141.00 141.00 15 Discount price 17 Mode 19 Demand S 4.00 42 501 S 62.00 | S 73.00 | S 84.00 | S 95.00 | $106.00 | S 117.00 | S 128.00 | S 139.00 | $150.00 0.0286 0.0857 0.11 0.1429 .2000 0.1714 0.1429 0.0857 0.0286 20 Purchase Quantity Max revenue with perfect 126.00 $129.00 S132.00 $135.00 $138.00 141.00 14400147.00 150.00 $138.26 $7.34 2 Quantity Sold 23 Surplus Quantty Historical Seasonal Sales (in 1000 units) Rel Fr 1 2.8571% 3 8.5714% 4 11.4286% 5 14.2857% 7 20.000096 6 17.1429% 5 14.2857% 3 8.5714% 1 2.857196 35 100.000096 25 Profit 43 47 45 48 46Related Questions
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