A home improvement store sells hydrangea plants during the spring planting season. The hydrangeas cost the store $15 per unit, and sell to customers for $45, but any leftovers at the end of the season are salvaged to a local landscaper for $7/unit. A competitor has advertised that it guarantees 99% of customers find the product they’re looking for in stock. The competitor’s posted price for hydrangeas is $50, and they salvage to the same local landscaper for $7/ hydrangea plant. If the competitor’s advertised service level is correct for hydrangeas and they follow an optimal stocking policy, what does it imply their cost per hydrangea is?

The army is attempting to determine the optimal replacement age for a piece of field equipment. The equipment costs $280,000 to replace. The manufacturer will supply a rebate toward the next purchase that declines at a rate of 20 percent per year. Maintenance costs for the first year are estimated to be $1,000, and they increase roughly at the rate of 18 percent per year. Estimate the number of years that the army should hold the equipment before making a replacement.(Production and Operation Analysis by Steven Nahmias, 7th edition, pg.774 Problem # 24)

LPM Corp. produces and sells two types of frozen burgers, Turkey Burgers and Veggie Burgers. In the most recent month, the firm sold 12,000 Turkey Burgers and 8,000 Veggie Burgers. Turkey Burgers sold for $14.00 per box and variable costs were $7.40 per box. The Veggie Burgers sold for $16.00 per box and variable costs were $8.25 per box. The fixed expenses of the entire company were $41,160. If the sales mix were to shift toward the Turkey Burgers product line with total sales volume remaining constant at 20,000, the overall break-even point for the entire company:

Jasmine owns 12 apartment buildings in a college town, which it rents exclusively to students. Each apartment building contains 120 rental units, but the owner is having cash flow problems due to an average vacancy rate of nearly 50 percent. The apartments in each building have comparable floor plans, but some buildings are closer to campus than others. Jasmine’s accumulated data from last year on the number of apartments rented, the rental price (in dollars), and the amount spent on advertising (in hundreds of dollars) at each of the 12 apartments are available below. These data, along with the distance (in miles) from each apartment building to campus, are presented below. Jasmine is looking for expert advice on the available data to inform administrative and business policy. By applying this scenario, help her regress the quantity demanded of her apartments on price, advertising, and distance datasets by using Excel or SPSS. Observation or (Number of Apartments) Quantity…

A manufacturing plant procures 100,000 filters per year.  Each unit has a fixed order cost is $50. To maintain the inventory in optimal conditions, there is a carrying cost rate of 10% per year. The vendor of filters has offered the following price breaks: for orders of more than 5,000 filters, cost is $4.50/unit; for orders between 1,000 and 5,000 filters, cost is $4.75/unit; orders less than 1,000 filters have a cost of $5.00/unit.    Find the economic order quantity. Calculate the average annual cost for the optimal solution.

Taylor Smith owns a small clothing company, Cuteness for You, that offers an online subscription and personal shopping service targeted at busy families with children aged newborn to five years old. Currently, Taylor has one level of subscription service, the standard service. For $100 a month, the standard service provides its customers a monthly delivery of 10 clothing items carefully chosen to match the child's size, gender, and emerging style. The online clothing subscription market is fairly new but is growing rapidly and thus Taylor is considering extending the product line to increase its market share and profits.   Taylor is debating whether to add a premium subscription service featuring profitable high-markup items for $125 per month, a basic subscription service that contains lower-markup popular items priced at $75 per month, or possibly both. Taylor knows that the new product lines provide an opportunity to attract more customers and possibly increase revenues and profit,…