The purchasing agent at Electronics Warehouse buys clothes dryers by the trucklo
ID: 3141261 • Letter: T
Question
The purchasing agent at Electronics Warehouse buys clothes dryers by the truckload at the start of each model year. There are 100 dryers in a truckload. The purchasing agent is considering the purchase of either one, two or three truckloads for the coming year. Dryers cost $80 each from the supplier, and are sold by Electronics Warehouse during the model year for $100 each. At the end of the model year, unsold dryers are disposed of at a sale for a price of $70 each. The purchasing agent anticipates that demand during the regular model year will be for either 150, 250, or 280 dryers.
1. Build a payoff matrix showing net profit for the buyer’s decision.
Explanation / Answer
Demand Items Total Cost @ 80 per piece Sold During Model Year @$100 per piece Disposed of at sale @70 per piece Total Revenue Profit No. of Items Revenue No. of Items Revenue 150 100 8000 100 10000 0 0 10000 2000 200 16000 150 15000 50 3500 18500 2500 300 24000 150 15000 150 10500 25500 1500 250 100 8000 100 10000 0 0 10000 2000 200 16000 200 20000 0 0 20000 4000 300 24000 250 25000 50 3500 28500 4500 280 100 8000 100 10000 0 0 10000 2000 200 16000 200 20000 0 0 20000 4000 300 24000 280 28000 20 1400 29400 5400
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