Quantitative Methods II - Question 3. Please help.Thank you Question 3Technic Limited is an established company that sells trending technologicalequipment. Their aim has always been to supply the Caribbean market with thelatest Orange ephone on the same release date as its international competitors.For the past five years, they have done this. However, many phones were left instock beyond the first month and could not be sold until a significant pricereduction was initiated. This has caused the company to suffer loss. This year theyare contemplating retailing the ephone15 on September 1st (the internationalrelease date) and would like to utilize past data to help make a decision on thequantity of ephones to purchase.Number of Probabilityephones sold35.10TT360.1537.2538.2539.15.1040Table 1: Demand for ephonesThe ephone is priced to sell at $10,000 per unit and its cost is constant at $7,000per unit. Each unit not sold within the first month has a salvage value of $5,000.Demand is as shown in Table 1.a. How many units should be ordered?Similarly, Technic retails external hard drives. It has 165 units in stock and ordersevery 2 weeks when the distributor visits the facility. Demand for this itemaverages 20 units with a standard deviation of 4 units. Lead time for the productto arrive is one week. Management has a goal of 98% probability of not stockingout for this item. The salesperson should arrive within 2 days. (Assume 20 unitswill be sold each day until his arrival).b. How many units should be ordered?

It is about inventory management and demand forecasting. In order to ensure that a company does not…

Technic Limited is an established company that sells trending technological equipment. Their aim has always been to supply the Caribbean market with the latest Orange ephone on the same release date as its international competitors. For the past five years, they have done this. However, many phones were left in stock beyond the first month and could not be sold until a significant price reduction was initiated. This has caused the company to suffer loss. This year they are contemplating retailing the ephone15 on September 1st (the international release date) and would like to utilize past data to help make a decision on the quantity of ephones to purchase. Number of ephones sold 35 36 37 38 39 40 Table 1: Demand for ephones a. How many units should be ordered? Probability The ephone is priced to sell at $10,000 per unit and its cost is constant at $7,000 per unit. Each unit not sold within the first month has a salvage value of $5,000. Demand is as shown in Table 1. .10 0.15 .25 .25 .15 .10 b. How many units should be ordered? Similarly, Technic retails external hard drives. It has 165 units in stock and orders every 2 weeks when the distributor visits the facility. Demand for this item averages 20 units with a standard deviation of 4 units. Lead time for the product to arrive is one week. Management has a goal of 98% probability of not stocking out for this item. The salesperson should arrive within 2 days. (Assume 20 units will be sold each day until his arrival).

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 6E: The economic analysis division of Mapco Enterprises has estimated the demand function for its line...