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[answered] MODULE SEVEN 1 CHAPTER 4 Q. In this chapter, we discussed t


Q. 9.? Consider the following demand scenario:??

Quantity

Probability

2,000

3%

2100

8%

2200

15%

2300

30%

2400

17%

2500

12%

2600

10%

2700

5%

??????????? SUPPOSE THE MANUFACUTURER PRODUCES AT A COST OF $20/UNIT.? THE DISTRIBUTOR SELLS TO END CUSTOMERS FOR $50/UNIT DURING SEASON, UNSOLD UNITS ARE SOLD FOR $10/UNIT AFTER SEASON.

B. Suppose the manufacturer is make-to-order; that is, the timing of events is as follows:

  • The distributor orders before it receives demand from end customer.
  • The manufacturer produces the amount ordered by the distributor.
  • Customer demand is observed.

Suppose the manufacturer sells to the distributor at $40/unit, how much will the distributor order?? Wheat is the expected profit for the manufacturer and distributor?

Find an option contract such that both the manufacturer and distributor enjoy a higher expected profit than (b)(i).? What is the expected profit for the manufacturer and the distributor?

C. Suppose the manufacturer is make-to-stock; that is, the timing of events is as follows:

The manufacturer produces a certain amount.

The distributor observes demand

The distributor orders from the manufacturer

Using the same wholesale price contract as part (b)(i), calculate the production/inventory level of the manufacturer.? What is the expected profit for the manufacturer and distributor?? Compare your results with part (b)(i).

Find a cost-sharing contract such that both the manufacturer and distributor enjoy a higher expected profit that that in (c)(i), and calculated their expected profits.

???????????

Q. 10. ?Using the data of Question 9, suppose the manufacturer has an inflated demand forecast as follows:

Quantity

Probability

2200

5%

2300

6%

2400

10%

2500

17%

2600

30%

2700

17%

2800

12%

2900

3%

Suppose the manufacturer is make-to-order (timing of events as in 9(b)).? Using your contracts in Question 9(b)(ii)., find the order quantity, and expected profits of the distributor and of the manufacturer.? Compare your answers with 9(b)(ii).

Suppose the manufacturer is make-to-stock (timing of events as in 9(c)).? Using your contracts in Question 9(c)(ii), find the production quantity, expected profits of the manufacturer and of the distributors.? Compare your answers with 9(c)(ii)

If you are the distributor and you have the choice of revealing the true demand forecast or inflated demand forecast to the manufacturer, what will you do in each case? Explain.


MODULE SEVEN 1 CHAPTER 4

 

Q. 7. In this chapter, we discussed two classes of supply contracts for strategic components,

 

one of which is appropriate when the manufacturer manufactures goods after the

 

distributor orders them, but the distributor orders them before he observes demand, while

 

the other is appropriate when the manufacturer manufactures goods before he distributor

 

orders them, but the distributor orders after he observes demand. Discuss another possible

 

situation, and describe how supply contracts might be beneficial to the supply chain in this

 

new situation.

 

Q. 9. Consider the following demand scenario:

 

Quantity

 

2,000

 

2100

 

2200

 

2300

 

2400

 

2500

 

2600

 

2700 Probability

 

3%

 

8%

 

15%

 

30%

 

17%

 

12%

 

10%

 

5% SUPPOSE THE MANUFACUTURER PRODUCES AT A COST OF $20/UNIT. THE

 

DISTRIBUTOR SELLS TO END CUSTOMERS FOR $50/UNIT DURING SEASON, UNSOLD UNITS ARE

 

SOLD FOR $10/UNIT AFTER SEASON.

 

B. Suppose the manufacturer is make-to-order; that is, the timing of events is as

 

follows: The distributor orders before it receives demand from end customer. The manufacturer produces the amount ordered by the distributor. Customer demand is observed.

 

i.

 

Suppose the manufacturer sells to the distributor at $40/unit, how much will

 

the distributor order? Wheat is the expected profit for the manufacturer and

 

distributor?

 

ii.

 

Find an option contract such that both the manufacturer and distributor enjoy

 

a higher expected profit than (b)(i). What is the expected profit for the

 

manufacturer and the distributor?

 

C. Suppose the manufacturer is make-to-stock; that is, the timing of events is as

 

follows: The manufacturer produces a certain amount. The distributor observes demand The distributor orders from the manufacturer MODULE SEVEN 2

 

i.

 

ii. Using the same wholesale price contract as part (b)(i), calculate the

 

production/inventory level of the manufacturer. What is the expected profit

 

for the manufacturer and distributor? Compare your results with part (b)(i).

 

Find a cost-sharing contract such that both the manufacturer and distributor

 

enjoy a higher expected profit that that in (c)(i), and calculated their expected

 

profits. Q. 10. Using the data of Question 9, suppose the manufacturer has an inflated demand forecast

 

as follows:

 

Quantity Probability

 

2200

 

5%

 

2300

 

6%

 

2400

 

10%

 

2500

 

17%

 

2600

 

30%

 

2700

 

17%

 

2800

 

12%

 

2900

 

3%

 

A. Suppose the manufacturer is make-to-order (timing of events as in 9(b)). Using

 

your contracts in Question 9(b)(ii)., find the order quantity, and expected profits

 

of the distributor and of the manufacturer. Compare your answers with 9(b)(ii).

 

B. Suppose the manufacturer is make-to-stock (timing of events as in 9(c)). Using

 

your contracts in Question 9(c)(ii), find the production quantity, expected profits

 

of the manufacturer and of the distributors. Compare your answers with 9(c)(ii)

 

C. If you are the distributor and you have the choice of revealing the true demand

 

forecast or inflated demand forecast to the manufacturer, what will you do in

 

each case? Explain.

 


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