Oregon State University Has Reached the Final Four in the 2016

question 53

Essay

Oregon State University has reached the final four in the 2016 NCAA Women's Basketball Tournament, and as a result, a sweatshirt supplier in Corvallis is trying to decide how many sweatshirts to print for the upcoming championships. The final four teams (Oregon State, University of Washington, Syracuse, and University of Connecticut) have emerged from the quarterfinal round, and there is a week left until the semifinals, which are then followed in a couple of days by the finals. Each sweatshirt costs $12 to produce and sells for $24. However, in three weeks, any leftover sweatshirts will be put on sale for half price, $12. The supplier assumes that the demand (in thousands) for his sweatshirts during the next three weeks, when interest is at its highest, follows the probability distribution shown in the table below. The residual demand, after the sweatshirts have been put on sale, also has the probability distribution shown in the table below. The supplier realizes that every sweatshirt sold, even at the sale price, yields a profit. However, he also realizes that any sweatshirts produced but not sold must be thrown away, resulting in a $12 loss per sweatshirt.
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Demand distribution at regular price Demand distribution at reduced price
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-Use simulation to analyze the supplier's problem. Determine how many sweatshirts he should produce to maximize the expected profit.

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Definitions:

Startle Reflex

An automatic response to sudden, unexpected stimuli, such as loud noises, that is designed to protect the body from potential threats.

Fear

A disagreeable feeling resulting from the conviction that a person or entity poses a risk, may inflict harm, or constitutes a menace.

Emotional Expression

The way in which a person outwardly shows or communicates their emotions, through facial expressions, body language, or verbal communication.

Decision Making

The method of selection that involves pinpointing what decision needs to be made, collecting relevant information, and evaluating different potential solutions.