Business, 03.07.2020 19:01 lisamiller

Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $20 each from its Asian supplier. Unfortunately, at the time the order is placed, demand is still uncertain. Teddy Bower forecasts that its demand is normally distributed with a mean of 2,700 and a standard deviation of 1,425. Teddy sells the parkas for $48 each. Unsold parkas have little salvage value and are donated to charity. a) How many parkas should Teddy Bower buy from TeddySports to maximize expected profit?
For parts b) through d), assume Teddy Bower orders 3,000 parkas (Q=3,000).
b) What is Teddy Bower’s CSL (in-stock probability)?
c) On average, how many customers does Teddy Bower expect to turn away because of shortage? And on average, how many parkas will Teddy Bower liquidate after each season?
d) What is Teddy Bower’s expected profit?

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Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $20 each...

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