Michael is selling baseball hats outside of a local Pirates game. Michael purchases the hats from a vendor for $6 each,
Posted: Wed May 04, 2022 8:26 am
Michael is selling baseball hats outside of a local Pirates
game. Michael purchases the hats from a vendor for $6 each, he
sells them to fans for $18 a piece. If he has any remaining hats
that he doesn't sell at the game, Michael sells them to a sporting
goods store for $2 each. Demand for the hats is a discrete
uniform distribution with the interval [25,175].
1. What is Michael's optimal Newsvendor order quantity?
2. Before ordering, Michael has 40 hats in storage. What is his
optimal order quantity now because of the stored items?
3. Instead of 40 hats in storage, say Michael finds another box
and now has 90 hats in storage. What is his optimal ordering
quantity now?
game. Michael purchases the hats from a vendor for $6 each, he
sells them to fans for $18 a piece. If he has any remaining hats
that he doesn't sell at the game, Michael sells them to a sporting
goods store for $2 each. Demand for the hats is a discrete
uniform distribution with the interval [25,175].
1. What is Michael's optimal Newsvendor order quantity?
2. Before ordering, Michael has 40 hats in storage. What is his
optimal order quantity now because of the stored items?
3. Instead of 40 hats in storage, say Michael finds another box
and now has 90 hats in storage. What is his optimal ordering
quantity now?