Question
In: Economics
Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must...
Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Zed and Adrian estimate that the demand for bicycles this season will be 20, 30, 40, or 50 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $64 if they order 40, $56 if they order 60. The bicycles will be sold for $76 each if they are not on sale. Any bicycles left over at the end of the season will go on sale and will be sold at $46 each. Create a payoff table that helps Z to A Bicycle decide how many bicycles (20, 40, or 60) to order. Answer the following questions based on the payoff table.
- How much is the profit of the shop, if they order 40 bicycles and the demand is 20?
- How much is the profit of the shop, if they order 40 bicycles and the demand is 30?
- How much is the profit of the shop, if they order 40 bicycles and the demand is 40?
- How much is the profit of the shop, if they order 40 bicycles and the demand is 50?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Decision under uncertainty Zed and Adrian and run a small bicycle shop called"Z to A Bicycles"....
Decision under uncertainty
Zed and Adrian and run a small bicycle shop called"Z to A
Bicycles". They must order bicycles for the coming month. Orders
for the bicycles must be placed in quantities of twenty (20). If
Zed and Adrian run out of bicycles during the month, then they will
suffer a loss of "goodwill" among their customers. Zed and Adrian
estimate that the demand for bicycles this month will be 10, 30,
50, or 70 bicycles but the probabilities...
Tim’s Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has...
Tim’s Bicycle Shop sells 21-speed bicycles. For purposes of a
cost-volume-profit analysis, the shop owner has divided sales into
two categories, as follows:
Product Type
Sales Price
Invoice Cost
Sales Commission
High-quality
$
1,150
$
490
$
70
Medium-quality
570
270
60
Three-quarters of the shop’s sales are medium-quality bikes. The
shop’s annual fixed expenses are $196,500. (In the following
requirements, ignore income taxes.)
Required:
Compute the unit contribution margin for each product type.
What is the shop’s sales mix?...
Bicycles arrive at a bike shop in boxes. Before they can besold, they must be unpacked,...
Bicycles arrive at a bike shop in boxes. Before they can
besold, they must be unpacked, assembled, and tuned(lubricated,
adjusted, etc.). Based on past experience, the shop manager
creates a model of how long this may take based on the assumptions
that the times for each setup phase are independent, each phase
follows a Normalmodel, and the means and standard deviations of
the times in minutes are as shown in the table. Complete parts a)
and b).
Phase Mean SD...
Jon Hoke owns a bicycle shop. He stocks three types of bicycles: road-racing, cross-country and mountain....
Jon Hoke owns a bicycle shop. He stocks three types of bicycles:
road-racing, cross-country
and mountain. A road-racing bike costs $1,200, a cross-country
bike costs $1,700 and a
mountain bike costs $900. He sells road-racing bikes for $1,800,
cross-country bikes for $2,100
and mountain bikes for $1,200. He has $12,000 available this
month to purchase bikes. Each
bike must be assembled: a road-racing bike requires 8 hours to
assemble, a cross-country bike
requires 12 hours and a mountain bike requires...
A small candy shop is preparing for the holiday season. The owner must decide how many...
A small candy shop is preparing for the holiday season. The
owner must decide how many bags of deluxe mix and how many bags of
standard mix of Peanut/Raisin Delite to put up. The deluxe mix has
.68 pound raisins and .32 pound peanuts, and the standard mix has
.56 pound raisins and .44 pound peanuts per bag. The shop has 81
pounds of raisins and 66 pounds of peanuts to work with.
Peanuts cost $.66 per pound and raisins...
A small candy shop is preparing for the holiday season. The owner must decide how many...
A small candy shop is preparing for the holiday season. The
owner must decide how many bags of deluxe mix and how many bags of
standard mix of Peanut/Raisin Delite to put up. The deluxe mix has
.67 pound raisins and .33 pound peanuts, and the standard mix has
.55 pound raisins and .45 pound peanuts per bag. The shop has 80
pounds of raisins and 65 pounds of peanuts to work with.
Peanuts cost $.65 per pound and raisins...
A small candy shop is preparing for the holiday season. The owner must decide how many...
A small candy shop is preparing for the holiday season. The
owner must decide how many bags of deluxe mix and how many bags of
standard mix of Peanut/Raisin Delite to put up. The deluxe mix has
.70 pound raisins and .30 pound peanuts, and the standard mix has
.50 pound raisins and .50 pound peanuts per bag. The shop has 75
pounds of raisins and 60 pounds of peanuts to work with.
Peanuts cost $.60 per pound and raisins...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- Java. If possible please put explanations for each line of code. Write a test program that...
- . Use the following information to calculate your company's expected return State Probability Return Boom 20%...
- You are considering the following two projects and can only take one. Your cost of capital...
- C++: Write a program that produces truth tables for the following compound propositions. Write the header...
- 1. What is the historical role of investment bankers ? Has this role changed ? Why...
- How were the original Internet requirements met through its design? What are the two main requirements...
ADVERTISEMENT