Question

PA 13-6 To ensure a full line of outdoor clothing and accessories, the Use Table 13.4 To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, Teddy Bower does not have expertise in manufacturing those kinds of boots. Hence, Teddy Bower contacted several Taiwanese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $51. However, $40 per boot was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 55% discount at the end of the season. Given the $51 price, Teddy Bower's demand forecast is for 425 boots, with a standard deviation of 276 If a part of the question specifies whether to use Table 13.4, or to use Excel, then credit for a correct answer will depend on using the specified method If Teddy Bower decides to include these boots in its assortment, how many boots should Teddy Bower order from the supplier? Use Table 13.4 Suppose Teddy Bower orders 360 boots. What is Teddy Bower's expected profit? Use Table 13.4 Round your answer to 2 decimal places.) The marketing department insists that their in-stock probability be at least 98% C. Given this mandate, how many boots do they need to order? Use Table 13.4 John Briggs, a buyer in the procurement department, overheard at lunch a discussion of the "boot problem". He suggested that Teddy Bower ask for a quantity discount from the supplier. After following up on his suggestion, the supplier responded that Teddy Bower could get a 12% discount if they were willing to order at least 775 boots. If the objective is to maximize expected profit, how many boots should Teddy Bower order given this new offer? Use Table 13.4