Please help!!! Posted this a few days ago and no one answered. (Table 13.4 at bo
ID: 366860 • Letter: P
Question
Please help!!! Posted this a few days ago and no one answered. (Table 13.4 at bottom of page, below question)
Use Table 13.4 Flextrola, Inc., an electronics systems integrator, is planning to design a key component for their next generation product with Solectrics. Flextrola will integrate the component with some software and then sell it to consumers. Given the short life cycles of such products and the long lead times quoted by Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginning of its selling season. Flextrola's demand during the season is normally distributed with a mean of 1400 and a standard deviation of 600 Solectrics' production cost for the component is $51 per unit, and it plans to sell the component for $72 per unit to Flextrola. Flextrola incurs essentially no cost associated with the software integration and handling of each unit. Flextrola sells these units to consumers for $123 each. Flextrola can sell unsold inventory at the end of the season in a secondary electronics market for $54 each. The existing contract specifies that once Flextrola places the order, no changes are allowed to it. Also Solectrics does not accept any returns of unsold inventory, so Flextrola must dispose of excess inventory in the secondary market. If a part of the question specifies whether to use Table 13.4, or to use Excel, then credit for a correct answer will depend on using the specified meth What is the probability that Flextrola's demand will be within 25% of its forecast? (Round your answer to 4 decimal places.) What is the probability that Flextrola's demand will be more than 40% greater than a- Use Excel b. Flextrola's forecast? Use Excel (Round your answer to 4 decimal places.) Under this contract, how many units should Flextrola order to maximize its expected profit? Use Table 13.4 If Flextrola orders 1100 units, how many units of inventory can Flextrola's expect to sell in the secondary electronics market? Use Table 13.4 (Round your answer to 2 decimal places.) e. If Flextrola orders 1100 units, what is expected sales? (Round your answer to 2 decimal places.) f. If Flextrola orders 1100 units, what is expected profit?Explanation / Answer
a) The Upper and lower limit for 25% of forecast are 1400*125% = 1750 and 1050
z value for upper limit = (1750-1400)/600 = 0.5833, F(z) =NORMSDIST(0.5833) =0.7202
z value for lower limit = (1050-1400)/600 = -0.5833, F(z) =NORMSDIST(-0.5833) =0.2798
Therefore, probability of demand being between 1050 and 1750 = 0.7202 - 0.2798 = 0.4404
b) 40% greater than forecast = 1400*140% = 1960
z value = (1960-1400)/600 =0.9333
F(z) = NORMSDIST(0.9333) =0.8247
Probability of demand being greater than 1960 = 1-0.8247 = 0.1753
c) For Flextrola,
Shortage of Underage cost, Cu = 123-72 = 51 (also known as marginal profit)
Excess or Overage cost, Co = 72-54 = 18 (also known as marginal loss)
Critical ratio = Cu/(Cu+Co) = 51/(51+18) = 0.7391 this is F(z)
Lookup above value of F(z) in the table, for corresponding z value = 0.6407 (using interpolation =((0.7-0.6)/(0.7580-0.7257))*(0.7391-0.7257)+0.6)
Units Flextrola should order = +z = 1400+0.6407*600 = 1784
d) z value = (1100-1400)/600 = -0.5
Corresponding I(z) value taken from the table = 0.1978
Expected inventory, V = *I(z) = 600*0.1978 = 119
Flextrola can expect to sell 119 units in the secondary market
e) Expected sales, S = Q - *I(z) = 1100 - 119 = 981
f) Expected profit = S*Cu - V*Co = 981*51 - 119*18 = $ 47,890