The manager of the Campus Bookstore is buying 'Class of 22' Aggie branded jackets in preparation for graduation. They have been offered a price of $95 from a supplier and plan to sell the jackets for $125. If there are jackets remaining at the end of May the manager anticipates having to mark them down to $90 to move the inventory. The manager has forecast demand with a mean of 500 jackets and a standard deviation of 75. How many jackets should the manager order, and how many jackets should they expect to markdown?
a. The manager of the Campus Bookstore is buying 'Class of 22' Aggie branded jackets in preparation for graduation. They have been offered a price of $95 from a supplier and plan to sell the jackets for $125. If there are jackets remaining at the end of May the manager anticipates having to mark them down to $90 to move the inventory. The manager has
b. A supply chain intern at the store that recently learned about read/react capability has identified a supplier that charges $105/jacket but whose shorter lead time would permit a 2nd order to be placed during the sales season. The intern has also forecast that if this supplier were used, the store should plan for initial demand of 150 jackets with a standard deviation of 50. Based on this information, how many jackets should they recommend the manager purchase and how much inventory should be expected from the order?
c. The manager took the intern's advice and ordered from the supplier in question 2. Early sales indicate the jackets were a hit and that demand for the remainder of the season would be for 600 jackets with a standard deviation of 100. How many additional jackets should the manager purchase, how many are expected to remain at the end of May, and what will be the net profit? (Hint: Don’t forget how the first order worked out).
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