qnt wk 3 team assignments

1. SuperFun Toys Case Study

· -Use the sales forecaster's prediction to describe a normal probability distribution that can be used to approximate the demand distribution.

· Sketch the distribution and show its mean and standard deviation. Hint: To find the standard deviation, think Empirical Rule covered in Week 1.

· Compute the probability of a stock-out for the order quantities suggested by members of the management team (i.e. 15,000; 18,000; 24,000; 28,000).

· Compute the projected profit for the order quantities suggested by the management team under three scenarios: pessimistic in which sales are 10,000 units, most likely case in which sales are 20,000 units, and optimistic in which sales are 30,000 units.

· One of SuperFun's managers felt the profit potential was so great the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock- outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios?

2. Expansion Strategy and Establishing a Re-Order Point

Case 1: Bell Computer Company

· Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?

· Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty? 

Case 2: Kyle Bits and Bytes

· What should be the re-order point? How many HP laser printers should he have in stock when he re-orders from the manufacturer?