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Unformatted text preview: OM 335 Fall 2008 140737d45f2ff3788f43ea1d82a5541fdde7ea30.doc P15: Color Printer You are offering two types of printers. The demands for the next selling season are shown in the table below. Since production lead time is very long, you have to produce to stock. Suppose the cost (production and shipping) and selling price for each printer (regardless A or B) are $70 and $100. At the end of the selling season, a discount of 40% is offered. a) If two types of printers are produced independently, what are the optimal production quantities so that the mismatch costs are minimized? What are the mismatch costs? [Hint: Solve a newsvendor problem for each type of the printer and compute the mismatch cost.] Demand Scenario Probability Printer A Demand (units) Printer B Demand (units) Total Demand (units) Scenario 1 25% 100 250 350 Scenario 2 25% 200 200 400 Scenario 3...
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- Fall '08
- Harshad number, mismatch cost, B Demand