Asked by Rhonda Golden on Jun 30, 2024
Verified
If The Kingdom and Alexandria are acting independently,how many units should they order?
A) 284
B) 314
C) 367
D) 380
Body Armor
Protective clothing or equipment designed to absorb or deflect physical attacks, typically used by military personnel, law enforcement officers, and civilians in certain situations.
Demand
The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified time period.
The Kingdom
Often a reference to a realm or domain governed by a king, but without specific context, it's difficult to provide a precise definition.
- Work out the prime order magnitudes and probable profit for assorted retail conditions.
- Analyze the effect of demand distribution on supply chain strategies.
Verified Answer
LN
Leslie NungarayJul 05, 2024
Final Answer :
B
Explanation :
Given the demand for body armor is normally distributed with a mean (μ) of 250 units and a standard deviation (σ) of 50 units, the optimal order quantity can be determined using the newsvendor model. The critical ratio in this scenario is not directly provided, but since The Kingdom and Alexandria are looking to maximize their profits without specific information on overage or underage costs, we aim for a service level that matches the demand distribution. The choice closest to the mean without exceeding the standard deviation suggests an approach to manage risk while aiming to meet demand. Therefore, 314 units (choice B) is the most reasonable order quantity given the information, aligning closely with the mean demand and considering the variability in demand represented by the standard deviation.
Learning Objectives
- Work out the prime order magnitudes and probable profit for assorted retail conditions.
- Analyze the effect of demand distribution on supply chain strategies.