Hamptonshire Express: Problems 1-3 Essay

line 1A. How galore(postnominal) newspapers should glimmer stock? Use the simulation in the spreadsheet Hamptonshire Express Problem 1 to identify the optimum stocking quantity. What is the profit at this stocking quantity?optimum Stocking Quantity 584Expected profit at optimum Stocking Quantity $331.43 B. moderate that the harbor derived in part (a) is consistent with the optimal stocking quantity in the Newsvendor model= have in mind = 500= Standard Deviation = degree centigrade= Overage embody = $0.20$0 = $0.20= Shortage Cost = $0.20$1.00 = $0.80= 1.8 = .2 gibe zvalue = .84.Problem 2A. How many hours should flare order daily in the creation of the profile section?The optimal measuring stick of hours Sheen should invest results in optimal profit/day at 4 hours With optimal stocking quantity 685And expected profit/day $371.33B. What explains Sheens choice of apparent motion level h?Since the marginal apostrophize of her effort is $10/hour and the marginal benefit of h er effort is peer to8 * 50 = 10 h = 42The hours invested allow for be optimized when marginal cost = marginal benefit, in this theatrical role h = 4. C. Compare the optimal profit under this scenario with the optimal profit derived in Problem 1.Optimal Profit in 1 = $331.43 584 units = $0.5675/unit Optimal Profit in 2 = $371.33 685 units = $0.5421/unitAlthough the optimal profit is change magnitude from scenario 1 to scenario 2 by $39.90 the per unit profit is down by 0.0254/unit nonplusd, however since overall profit is up, the added hours invested is inactive optimal.Problem 3A. Assuming h=4 what would Armentrouts stocking quantity be?Armentrouts optimal stocking quantity is 516B. Why does the optimal stocking quantity differ from the optimal stocking quantity identify in Problem 2? Is the result here consistent with the newsvendor formula?The optimal stocking quantities differ because there is a new player involved and new costs associated with overages and shortages. T hese results are still consistent with the newsvendor formula since the new model looks like= mean = 600= Standard Deviation = 100= Overage Cost = $0.80= Shortage Cost = $1.00$0.80 = $0.20= 1.8 = .2 corresponding zvalue = .85 .C. Now try variable h How does her optimal effort in this question differ from the consequence in question 2? Why?In drumhead 2, Sheens profit is maximized at optimal effort = 4. In Question 3, Sheens profit is optimal when h = 2 because her gelt are being shared with Armentrout and the amount of hours Sheen invests determines the amount of copies that Armentrout go out purchase depending on his demand.D. How would changing the stir price from the current value of $0.80 per newspaper impact Sheens effort level and Armentrouts stocking decision?Transfer Price Increase from $0.80 to $0.90 =Sheens swither = 2.25 to 3.063Armentrouts Stocking Decision = 491 to 459Sheens incentivized to tramp in more effort and therefore reap more profit but Armentrouts st ock will decline and collide with less profit if transfer price is increased.Transfer Price Decrease from $0.80 to $0.70 =Sheens sweat = 2.25 to 1.563Armentrouts Stocking Decision = 491 to 510If the transfer price is decreased, Sheens incentivized to put in less effort because she is making less profit and Armentrouts stock will increase since his costs are lower allowing him to make a higher profit.E. What conclusion can you draw about stocking and effort levels in a differentiated channel vis vis an integrated pissed that manufactures and retails its growth?Stocking and effort levels are optimized throughout the chain in an integrated firm that manufactures and retails its products because there is a direct benefit and because incentives are line up between manufacturing and retailing. They want to put forth the optimal effort to mother the maximum amount of units that will optimize profits.Optimal Profit in Problem 2 h=4 $371.33 685 Units with fill rate 98%In a differenti ated firm when there is an added level, in this case a level to retail, the manufacturing and retailing parties do not share the said(prenominal) goals, therefore stocking and effortlevels are not optimized. Supplier only wants to produce as much as retail will buy at the minimum effort level and retail only wants to buy as much as will make them an optimal profit, I because stocking surplusage will incur losses.Optimal Profit in Problem 3 h=4 516 Units with fill rate of only 86%