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Mathematics, 09.12.2020 21:20 wiltseliz4800
Leicester City Fanstore (LCF) will be selling the "new season jersey" for the 2018-2019 season. The regular price of the jersey is $80. Each jersey costs $40. Leftover jerseys will be sold at the end of the season (or later) at $30. Since jerseys are produced in China and lead time is long, Puma wants LCF to decide the quantity right now (December 2017).
a. After some analysis using historic data, LCF expects that the demand will follow a Normal distribution with a mean 40,000 and a standard deviation of 8,000 due to uncertainty in team performance. How many jerseys should LCF order?
b. 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 future. LCF thinks that the lost customer goodwill is around $10. Should LCF change their decision in part (a)? If yes, please state the number of jerseys LCF should order.
c. Please state whether the following statement is always true, and give a brief explanation. If c=c, the newsvendor solution is the mean.
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Leicester City Fanstore (LCF) will be selling the "new season jersey" for the 2018-2019 season. The...
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