The information here is the same for answering questions 41 to 43. Alex sells hotdog at $5 at the Piazza on the Christmas day (Dec. 25). As the supplier requires a firm order by the afternoon of Dec. 24. Alex must make a commitment before the demand is known. The supplier's wholesale price is $3 per unit of hotdog. Alex forecasts that the daily demand is normally distributed with mean 220 units and standard deviation 50. Any hotdog left by the end of Christmas day can be sold for only $2 per unit. How many hotdog(s) should Alex order from the supplier on Dec. 24? Choose the closest answer if needed because the supplier sells only packs of 20. 200 240 180 220 260
What is the expected overstocking cost for the extra unit if Alex orders the optimal number of hotdog? Choose the closest answer if needed. $1.00 $0.50 $1.33 $0.67 $0.33
Alex's supplier now offers a revenue sharing contract with the supplier such that Alex has to pay $0.5 to the supplier for each hotdog sold at the regular price of $5. Compared to the original wholesale price contract, how will the new contract change his ordering decision in any way (assuming other parameters remain as before)? The fixed ordering cost The underage cost Nothing has been changed The best inventory model to use The overage cost
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