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:

Imposing Tariffs

The act of applying taxes on imported goods to protect domestic industries.

Domestic Employment

Jobs located within a country's borders, contributing to its economy by providing work for its residents.

Trade Tariffs

Taxes imposed by a government on imported goods to protect domestic industries and generate revenue.

Wage Rates

The standardized amount of compensation received by a worker per unit of time or per task performed.