Question

The demand for a product of Carolina Industries varies greatly from month to month. The probability distribution in the following table, based on the past two years of data, shows the company's monthly demand.

Unit Demand Probability

300 0.20

400 0.25

500 0.35

600 0.20

(a) If the company bases monthly orders on the expected value of the monthly demand, what should Carolina's monthly order quantity be for this product?

(b) Assume that each unit demanded generates $70 in revenue and that each unit ordered costs $50. How much will the company gain or lose in a month (in dollars) if it places an order based on your answer to part (a) and the actual demand for the item is 300 units?

Answer #1

The demand for Carolina Industries’ product varies greatly from
month to month. Based on the past two years of data, the following
probability distribution shows the company’s monthly demand:
Unit Demand
Probability
300
0.20
400
0.30
500
0.35
600
0.15
a. If the company places monthly orders equal to the expected
value of the monthly demand, what should Carolina’s monthly order
quantity be for this product?
b. Assume that each unit demanded generates $70 in revenue and
that each unit...

3) The demand for a product varies from month to month. Based on
the past year's data, the following probability distribution shows
MNM company's monthly demand.
x
f(x)
Unit Demand
Probability
0
.10
1,000
.10
2,000
.30
3,000
.40
4,000
.10
a. Determine the expected number of units demanded per month and
the standard deviation

1. Boesenhofer, Inc., manufactures and sells ...
Boesenhofer, Inc., manufactures and sells two products: Product
N6 and Product N7. The company has an activity-based costing system
with the following activity cost pools, activity measures, and
expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product N6
Product N7
Total
Labor-related
DLHs
$
345,060
2,100
5,000
7,100
Machine setups
setups
128,534
600
800
1,400
Order size
MHs
107,598
4,100
3,800
7,900
$
581,192
The activity rate for the...

Pallets of Cake Mix Demanded
Probability
Cumulative
Probability
Fewer than 2
0.10
0.10
2
0.30
0.40
3
0.55
0.95
4
0.04
0.99
5
0.007
0.997
6
0.003
1.00
Sum:
1
Just Baked grew from one retail store in 2009 to thirteen stores
in early 2013. Demand for cupcakes exhibits patterns based on
seasons, store location, day of the week, and time of day. The
"freshness promise" implicit in the name Just Baked has to be
supported by the daily baking...

Charter Airline Operating Decisions
Firm-specific demand in the scheduled airline industry is
segmented by customer class and is highly uncertain so that an
order may not realize revenue and a unit sale. Airlines respond to
this dynamic, highly competitive environment by tracking
reservations at preannounced fares and reassigning capacity to the
various market segments (“buckets”) as business travelers,
vacationers, and convention groups book the flights above or below
expected levels several days and even weeks before scheduled
departure. This systems...

Analysis: This section should include the issue register as a
bare minimum, but may include also why-why diagrams, a Pareto
chart, a waste table and/or value-added analysis table. Flow
analysis or simulation of this case study might be possible but
might require making a lot of assumptions given the provided
data.
The first part of the project:
Introduction
Walmart has continued to retain
the top position on the Fortune 500 list for a consecutive fifth
year. The brand has...

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