| Optimal Buy-back contract with normally distributed demand | | | | | Full Name Member 1: |
| Inputs are in red, outputs in black | | | | | Full Name Member 2: |
| Mean of daily demand, m : | 350 | | | | Full Name Member 3: |
| Standard deviation of daily demand, s : | 40 |
| c (Manufacturer cost) | $4.00 |
| w (Wholesale price) | $8.00 |
| b (Buyback price) |
| r (Retail price) | $20.00 |
| Optimal Order Quantity |
| Underage penalty, Cu : |
| Overage penalty, Co : |
| Optimal CSL: Cu / (Co + Cu) |
| Optimal Order Quantity (q*) |
| Sales and Profits |
| Expected Sales (s) |
| Expected Manufacturer Profit PM= q*(w-c)-(q-s)*b |
| Expected Retailer Profit PR= s*r - q*w+(q-s)*b |
| Expected Supply Chain Profit |
| Notes: |
| Expected Sales (s)= P(D≤order quantity)*Expected(demand|demand≤order quantity)+P(demand>order quantity)*optimal order quanity |
| Expected(demand | demand≤order quantity) | -4.4591383894 |
Chrisyanqu
Buybackassignment.xls
