question archive A furniture store chain with 25 stores is stocking a fashionable chair in each of their stores with a normal demand distribution with a mean of 250 and a standard deviation of 125

A furniture store chain with 25 stores is stocking a fashionable chair in each of their stores with a normal demand distribution with a mean of 250 and a standard deviation of 125

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A furniture store chain with 25 stores is stocking a fashionable chair in each of their stores with a normal demand distribution with a mean of 250 and a standard deviation of 125.  The cost of the chair is $750, and it is sold for $1,500. Chairs that are not sold by the end of the season are sold for $250 per chair. If you would like partial credit, please show your work and the assumptions you made.

1)What are the values of cu and co?                                         (2 points))

2)What is the optimal service level for an individual store?                          (2 points)

3)What is the Z value?                                                                                        (2 points)

4)What is the optimal purchasing quantity for an individual store?             (3 points)

5)What is the probability of having some shortage at an individual store?            (4 points)

6)If the chain is purchasing and keeping the chairs centrally (for all 25 stores), what is the demand distribution at the center?                (5 points)

7)If the chain is purchasing and keeping the chairs centrally (for all 25 stores), what is the optimal order quantity?                                   (3 points)

8)What is the probability of having some shortage at the center??                                                             (4 points)

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