Submitted by: Submitted by faysys
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Category: Business and Industry
Date Submitted: 11/22/2014 05:25 AM
WAC: SKI JACKET PRODUCTION
Submitted By
Faisal Mahmud
Submitted To
Arif I Rana
Roll no. 16040017
Introduction : The Case gives an information about a small scale ski jacket production company , Egress Inc. The team of the company has worked out for new design and now have plan to launch the new product in winter . They are trying to make safe estimation for production quantity in the season.
Estimated demand : The egress staff has made estimated demand quantity figures keeping in view the historical sales data and economic conditions. ( Table 11.8)For the Profit calculation Variable and fixed costs are mentioned with the detail of Selling price per unit and salvage price per unit ( In case of excess produced jackets than demand) .
Calculating data facts :
In this case challenge for the Egress management is to decide the Quantity of Production in the season as they seek an uncertain demand where as the management wants to maximize the profits of the company . The quantity of the production should be of what value that there is maximum profit ?
For this purpose certain quantities could be estimated with the given estimation data given in table 11.8 . A mean demand quantity and standard deviation value is derived from this data By this data a model is generated to simulate for 1000 values of demands . Then estimated production quantities are valued to check the profit .
Profit = Revenue + Salvage value – Variable cost –Fixed cost
Production can all be sold if it is not greater than the demand level. However, if the production quantity is greater than the demand, it will be sold to discounters at the salvage value price.
The Random demands are generated through mean norminverse function. By generating 1000 random numbers the random demands are generated and hence the profits are calculated . The mean of the 1000 values of profit is obtained .
Case Analysis
Now to look forward for the optimum production quantity at which the profits are...