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  • Assigment 1 Supply Chain Management

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    wingyanlam233
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    The document contains a table with demand forecasts, probabilities of each forecast occurring, expected profits for different production quantities, and total expected profit. It analyzes the expected profit and production excess or shortage for a production quantity of 10000 units versus 16000 units. Producing 16000 units minimizes shortage but increases inventory holding costs, while producing 10000 units risks higher shortages and better customer satisfaction.

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    Assigment 1 Supply chain management

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    The document contains a table with demand forecasts, probabilities of each forecast occurring, expected profits for different production quantities, and total expected profit. It analyzes the expected profit and production excess or shortage for a production quantity of 10000 units versus 16000 units. Producing 16000 units minimizes shortage but increases inventory holding costs, while producing 10000 units risks higher shortages and better customer satisfaction.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    6 views6 pages

    Assigment 1 Supply Chain Management

    Uploaded by

    wingyanlam233
    The document contains a table with demand forecasts, probabilities of each forecast occurring, expected profits for different production quantities, and total expected profit. It analyzes the expected profit and production excess or shortage for a production quantity of 10000 units versus 16000 units. Producing 16000 units minimizes shortage but increases inventory holding costs, while producing 10000 units risks higher shortages and better customer satisfaction.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 6

    Profit for

    Demand Expected
    Probabilities each
    forecast Profit
    demand
    8000 0.1 380000 38000
    10000 0.1 500000 50000
    12000 0.2 620000 124000
    14000 0.35 740000 259000
    16000 0.15 860000 129000
    18000 0.1 980000 98000
    300000

    250000

    200000

    Excepted Profit
    150000

    100000

    50000 50000
    38000

    0
    6000 8000 100

    Expected Profit
    Expected Profit

    259000

    124000 129000

    98000

    50000
    38000

    0 8000 10000 12000 14000 16000 18000 20000

    ted Profit Production Quantity


    Demand Cumulative
    Probabilities
    forecast Prob
    8000 0.1 0.1
    10000 0.1 0.2
    12000 0.2 0.4
    14000 0.35 0.75
    16000 0.15 0.9
    18000 0.1 1

    Demand expected
    Probabilities Production excess shortage profit
    forecast profit
    8000 0.1 10000 0 7999.9 1099991 0
    10000 0.1 10000 0 9999.8 1399982 0
    12000 0.2 10000 0 11999.6 1699964 0
    14000 0.35 10000 0 13999.25 1999932.5 0
    16000 0.15 10000 0 15999.1 2299919 0
    18000 0.1 10000 0 17999 2599910 0
    Demand forecast Probabilities Production excess shortage

    8000 0.1 10000 2000 0


    10000 0.1 10000 0 0
    12000 0.2 10000 0 2000
    14000 0.35 10000 0 4000
    16000 0.15 10000 0 6000
    18000 0.1 10000 0 8000

    10000 qty 16000 qty

    shortage minimized; better


    Advantages less inventory holding cost
    customer experience

    chances of high shortage;


    Disadvantages more inventory holding cost
    poor customer satisfation
    expected
    profit
    profit
    240000 24000
    500000 50000
    500000 100000
    500000 175000
    500000 75000
    500000 50000
    Demand expected
    Probabilities Production excess shortage profit
    forecast profit
    8000 0.1 16000 8000 0 -180000 -18000
    10000 0.1 16000 6000 0 80000 8000
    12000 0.2 16000 4000 0 340000 68000
    14000 0.35 16000 2000 0 600000 210000
    16000 0.15 16000 0 0 860000 129000
    18000 0.1 16000 0 2000 860000 86000

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