c. The book and paper store also distributes a city guidebook that is ordered from the publisher when needed. The purchase cost is 60 kr., and the store must assume a lead-time of three months from the order is placed and the guidebooks arrive. The store reckons an annual interest rate of 20 % to compute holding costs and estimates a cost of 40 kr. for a lost sale if the guidebook is requested when they are out of stock. The expense of placing an order is set to 100 kr. The demand of the guidebook can vary a great deal, but the average during a three-month period has been calculated to 125. The demand can be described
c. The book and paper store also distributes a city guidebook that is ordered from the publisher when needed. The purchase cost is 60 kr., and the store must assume a lead-time of three months from the order is placed and the guidebooks arrive. The store reckons an annual interest rate of 20 % to compute holding costs and estimates a cost of 40 kr. for a lost sale if the guidebook is requested when they are out of stock. The expense of placing an order is set to 100 kr. The demand of the guidebook can vary a great deal, but the average during a three-month period has been calculated to 125. The demand can be described
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
Answer on b)
- Sales price = 80 kr
Purchase price = 30 kr
80 – 30 = 50 kr profit
20 magazines * 80 kr = 1.6000 kr which will maximize the profit over time.
Still dont get the answer on question c)
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