Answer Happy

[Newsvendor] Leicester City Fanstore (LCF) will be selling the “new season jersey" for the next year's season. LCF sets their retail price of the jersey at $80. LCF buys the jerseys from Puma for $40. Leftover jerseys will be sold at the end of the season (or later) for $30. Because Puma produces their jerseys in China and lead time is 3 months, Puma wants LCF to place their order now. Assume the demand distribution is uniform between 30,000 and 50,000. Use this information to answer Questions 5-9.

Question 7 0/5 pts What is the critical ratio? 0.3

Question 8 0 / 5 pts What quantity should LCF order? 39,000

Question 9 0/5 pts If a customer cannot buy the jersey from LCF (in the case of a stock- out), they may leave the store disappointed and use other channels (such as Puma stores or puma.com) in the future. LCF thinks that the lost customer goodwill cost is $10. What order quantity should LCF choose based on this new information? 42,400