Chip bilton sells sweatshirts at state u football games he


Chip Bilton sells sweatshirts at State U football games. He is equally likely to sell 300 or 600 sweatshirts at each game. Each time Chip places an order, he pays $700 plus $5 for each sweatshirt he orders. Each sweatshirt sells for $9. A holding cost of $3 per shirt (because of the opportunity cost for capital tied in sweatshirts as well as storage costs) is assessed against each shirt left at the end of a game. Assuming that the number of shirts ordered by Chip must be a multiple of 100, determine an ordering policy that maximizes the expected profit earned during the first three games of the season. Assume that any leftover sweatshirts have a value of $6.

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Chip bilton sells sweatshirts at state u football games he
Reference No:- TGS02193130

Expected delivery within 24 Hours