Vanila Strawberry Chocolate

Retail Price 150 200 250 Profit=rE{min(D,Q)}+sE{max(Q-D,0)}

Cost 75 90 110 Marginal Contribution(Q)=r(1-F(Q))+sF
Salvage Price 40 50 90
Mean demand 1000 500 250 F(Q)=(r-c)/(r-s) = Cu/(Cu+Co)
Standard Deviati 250 175 125
Optimum Qi 1118 609 394

R-C 75 110 140

R-S 110 150 160
Critical Fractile 0.6818181818 0.7333333333 0.875
Z 0.47 0.62 1.15
Qi 1118 609 394 2121

CAPACITY CONSTRAINT 1500

Capacity left Vanila Strawberry Chocolate Vanila StrawberryChocolate

1500 0 0 0 74.997 109.679 136.360
1490 0 0 10 74.997 109.679 135.611
1310 0 50 140 74.997 109.240 109.691
1295 0 60 145 74.997 109.105 107.927
1270 0 80 150 74.997 108.770 106.103
1260 0 90 150 74.997 108.565 106.103
890 0 380 230 74.997 73.033 70.170
870 20 380 230 74.995 73.033 70.170
290 580 400 230 69.887 67.422 70.170
280 580 400 240 69.887 67.422 65.101
3 788 446 263 53.196 53.176 53.374
0 790 447 263 52.950 52.850 53.374
 min(D,Q)}+sE{max(Q-D,0)}-cQ
Contribution(Q)=r(1-F(Q))+sF(Q)-c

/(r-s) = Cu/(Cu+Co)

Chocolate
 Vanila Strawberry Chocolate
Retail Price 150 200 250
Wholesale Price 75 90 110
Salvage Price 40 50 90
Mean demand 1000 500 250
Standard Deviation 250 175 125
Optimum Qi 1118 609 394

R-C 75 110 140

R-S 110 150 160
Critical Fractile 0.681818 0.7333333333 0.875
Z 0.47 0.62 1.15
Qi 1118 609 394 2121

Capacity available 1500

Retail Salvage Wholesale Mean

Q to be order Price value price Demand
1 Vanilla 790 150 40 75 1000
2 Strawberry 447 200 50 90 500
3 Chocolate 264 250 90 110 250

1500

Vanila Strawberry Chocolate

Retail Price 200 200 200
Wholesale Price 90 90 90
Salvage Price 50 50 50
Mean demand 1000 500 250
Standard Deviation 250 175 125
Optimum Qi 790 447 264 1500
Standard Expected Expected Expected Expected Expected
Deviation CV z L(z) Lost sales Sales Leftover InRevenue cost
250 0.250 -0.841 0.953005 238.25 761.75 27.9 115379 59225.56
175 0.350 -0.305 0.570047 99.76 400.24 46.3 82364.8 40191.38
125 0.500 0.110 0.346335 43.29 206.71 57.0 56811.25 29013.05
Expected Service
Profit Level
56153.8 0.200089
42173.4 0.380065
27798.2 0.543811

126125.4
Retail Price 20
Wholesale Price 9 Profit=rE{min(X,Q)}-sE{max(Q-X,0)}-WQ
Salvage Price 0 Marginal Contribution(Q)=r(1-F(Q))+sF(Q)-W
Mean demand 40000
Standard Deviation 15000 F(Q)=(r-W)/(r-s) = Cu/(Cu+Co)
Cu 11
Co 9
Cu/(Cu+Co) 0.550
Cost of Deterministic
Std Dev CoV Q Uncertainty Expected profit Model
10000 0.25 41257 79161 360839 440000
11000 0.28 41382 87077 352923 440000
12000 0.30 41508 94993 345007 440000
13000 0.33 41634 102909 337091 440000
14000 0.35 41759 110825 329175 440000
15000 0.38 41885 118741 321259 440000
16000 0.40 42011 126658 313342 440000
17000 0.43 42136 134574 305426 440000
18000 0.45 42262 142490 297510 440000
19000 0.48 42388 150406 289594 440000
20000 0.50 42513 158322 281678 440000
21000 0.53 42639 166238 273762 440000
22000 0.55 42765 174154 265846 440000
23000 0.58 42890 182070 257930 440000
24000 0.60 43016 189986 250014 440000
25000 0.63 43142 197902 242098 440000
Loss due
to uncertainty
79161
87077
94993
102909
110825
118741
126658
134574
142490
150406
158322
166238
174154
182070
189986
197902
 MC= 20

250 8909 -453823 -444913

300 8491 -455205 -446714
350 8073 -456587 -448514
400 7655 -457970 -450315
450 7237 -459352 -452115
500 6819 -460734 -453916
550 6400 -462116 -455716
600 5982 -463499 -457516
650 5564 -464881 -459317
700 5146 -466263 -461117
750 4728 -467645 -462918
800 4310 -469028 -464718
850 3892 -470410 -466518
900 3473 -471792 -468319
950 3055 -473175 -470119
1000 2637 -474557 -471920