Answered: Susana manages inventory at fashion…

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Susana manages inventory at fashion apparel retailer Orange Republic. In January, Suasana is determining order quantity for swimsuit for coming summer season. Each swimsuit is purchased at $50 and sold at retail price of $105. All the swimsuits that remain unsold at the end of summer, are sold to discount retailer TJ-Minn for $22 at the beginning of fall. The demand for swimsuits during summer is Normally distributed with mean of 200 and standard deviation of 50. If Susana order 250 swimsuits, what is the expected profit from Swimsuits?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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