a. Find Carolina's monthly order quantity for the product if the company bases m

Charles Cisneros

Charles Cisneros

Answered question

2021-11-20

a. Find Carolinas

Answer & Explanation

Provere

Provere

Beginner2021-11-21Added 18 answers

a. Calculation:
The data represents the probability distributions of companys
pseudoenergy34

pseudoenergy34

Beginner2021-11-22Added 22 answers

b. Calculation:
The assumption is that each unit demanded generates $70 in revenue and that each unit ordered costs $50.
It is expected that the monthly order quantity should be 445 units. Each unit ordered costs $50. Thus, the cost is calculated as, 445×$50=$22,250.
The actual demand for the item is 300 units and each unit demanded generates $70 in revenue. Thus the revenue is calculated as, 300×$70=$21,000.
Here, the cost is greater than the revenue and the company has a loss of $1,250(=$22,250$21,000) in a month if it places an order based on the answer to part (a) and the actual demand for the item is 300 units.

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