A firm sells five types of women’s parkas. Some data follow.
| Parka | Price | Cost | Salvage |
|
s | NV Q | NV EP | |
| A | $220 | 167.2 | 132 | 1,100 | 300 | 1,176 | $47949 | |
| B | 205 | 205 | 127.1 | 2,000 | 800 | 2,269 | 74,992 | |
| C | 190 | 190 | 121.6 | 3,000 | 1,500 | 3,646 | 99,815 | |
| D | 175 | 175 | 115.5 | 2,000 | 1,200 | 2,650 | 59,786 | |
| E | 160 | 160 | 108.8 | 1,000 | 700 | 1,472 | 27,011 |
The firm will produce some of the parkas well in advance of the selling season. The
other parkas are produced after a trade show that occurs shortly before the season
starts. After attending the trade show, the firm will basically know the demand for each
parka. Unfortunately the firm’s production capacity is limited after the trade show, so
the firm wants to produce at least 5,000 parkas before the show. Also, each parka
should be produced entirely either before or after the show……they don’t split
production.
a) Before answering the real question above, what would be the firm’s expected profit if
every parka model was produced before the trade show?
Expected Profit = ________________
b) Before answering the real question above, what would be the firm’s expected profit if
every parka model was produced after the trade show?
Expected Profit = ________________
c) What quantity of each parka model should be produced before the trade show to try to
maximize expected profits?
A =__________ B =__________ C =__________ D =__________ E =__________
d) What is the expected total number of parkas the firm will produce after the trade show?
Total Q = ______________
e) What is the firm’s expected profit based on the decisions in c) and d)?
Expected Profit = __________
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
