Teddy Bower Parkas:-
Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $10 each from its Asian supplier, TeddySports. Unfortunately, at the time of order placement, demand is still uncertain. Teddy Bower forecasts that its demand is normally distributed with mean of2, 1 00 and standard deviation of 1 ,200. Teddy Bower sells these parkas at $22 each. Unsold parkas have little salvage value; Teddy Bower simply gives them away to a charity.
a. What is the probability this parka turns out to be a "dog," defined as a product that sells less than half of the forecast?
b. How many parkas should Teddy Bower buy from TeddySports to maximize expected profit?
c. If Teddy Bower wishes to ensure a 98.5 percent fill rate, how many parkas should it order?
d. If Teddy Bower wishes to ensure a 98.5 percent in-stock probability, how many parkas should it order?
For parts e through g, assume Teddy Bower orders 3,000 parkas.
e. Evaluate Teddy Bowers expected profit.
f. Evaluate Teddy Bowers fill rate.
g. Evaluate Teddy Bowers stockout probability.