Average Demand During LT Std Dev of Demand During LT

Product A 95.00 10.00

Cost Normal Price

Product A $40 $60

Optimal Instock Rate F(R ) 96.7%

Optimal Reorder Point, R 114.15

Distribution of Demand During Lead Time

Demand (X) pdf (X) cdf (X)
0 0.0000 0.0000
1 0.0000 0.0000
2 0.0000 0.0000
3 0.0000 0.0000
4 0.0000 0.0000
5 0.0000 0.0000
6 0.0000 0.0000
7 0.0000 0.0000
8 0.0000 0.0000
9 0.0000 0.0000
10 0.0000 0.0000
11 0.0000 0.0000
12 0.0000 0.0000
13 0.0000 0.0000
14 0.0000 0.0000
15 0.0000 0.0000
16 0.0000 0.0000
17 0.0000 0.0000
18 0.0000 0.0000
19 0.0000 0.0000
20 0.0000 0.0000
21 0.0000 0.0000
22 0.0000 0.0000
23 0.0000 0.0000
24 0.0000 0.0000
25 0.0000 0.0000
26 0.0000 0.0000
27 0.0000 0.0000
28 0.0000 0.0000
29 0.0000 0.0000
30 0.0000 0.0000
31 0.0000 0.0000
32 0.0000 0.0000
33 0.0000 0.0000
34 0.0000 0.0000
35 0.0000 0.0000
36 0.0000 0.0000
37 0.0000 0.0000
38 0.0000 0.0000
39 0.0000 0.0000
40 0.0000 0.0000
41 0.0000 0.0000
42 0.0000 0.0000
43 0.0000 0.0000
44 0.0000 0.0000
45 0.0000 0.0000
46 0.0000 0.0000
47 0.0000 0.0000
48 0.0000 0.0000
49 0.0000 0.0000
50 0.0000 0.0000
51 0.0000 0.0000
52 0.0000 0.0000
53 0.0000 0.0000
54 0.0000 0.0000
55 0.0000 0.0000
56 0.0000 0.0000
57 0.0000 0.0000
58 0.0000 0.0000
59 0.0000 0.0000
60 0.0000 0.0000
61 0.0000 0.0001
62 0.0000 0.0001
63 0.0001 0.0001
64 0.0001 0.0002
65 0.0002 0.0004
66 0.0003 0.0006
67 0.0004 0.0010
68 0.0006 0.0015
69 0.0009 0.0022
70 0.0012 0.0032
71 0.0016 0.0046
72 0.0022 0.0065
73 0.0029 0.0091
74 0.0038 0.0125
75 0.0049 0.0168
76 0.0062 0.0223
77 0.0077 0.0292
78 0.0094 0.0377
79 0.0113 0.0480
80 0.0134 0.0604
81 0.0157 0.0750
82 0.0182 0.0919
83 0.0208 0.1114
84 0.0234 0.1335
85 0.0260 0.1582
86 0.0286 0.1855
87 0.0310 0.2153
88 0.0333 0.2474
89 0.0353 0.2817
90 0.0370 0.3178
91 0.0383 0.3555
92 0.0393 0.3943
93 0.0399 0.4340
94 0.0401 0.4740
95 0.0399 0.5140
96 0.0392 0.5536
97 0.0383 0.5924
98 0.0370 0.6300
99 0.0354 0.6662
100 0.0336 0.7007
101 0.0315 0.7333
102 0.0294 0.7637
103 0.0271 0.7920
104 0.0249 0.8180
105 0.0226 0.8418
106 0.0204 0.8632
107 0.0182 0.8825
108 0.0162 0.8997
109 0.0142 0.9149
110 0.0124 0.9282
111 0.0108 0.9398
112 0.0093 0.9498
113 0.0079 0.9584
114 0.0067 0.9657
115 0.0057 0.9719
116 0.0048 0.9771
117 0.0040 0.9814
118 0.0033 0.9850
119 0.0027 0.9880
120 0.0022 0.9905
121 0.0018 0.9924
122 0.0014 0.9940
123 0.0011 0.9953
124 0.0009 0.9963
125 0.0007 0.9972
126 0.0006 0.9978
127 0.0004 0.9983
128 0.0003 0.9987
129 0.0003 0.9990
130 0.0002 0.9993
131 0.0002 0.9994
132 0.0001 0.9996
133 0.0001 0.9997
134 0.0001 0.9998
135 0.0001 0.9998
136 0.0000 0.9999
137 0.0000 0.9999
138 0.0000 0.9999
139 0.0000 1.0000
140 0.0000 1.0000
141 0.0000 1.0000
142 0.0000 1.0000
143 0.0000 1.0000
144 0.0000 1.0000
145 0.0000 1.0000
146 0.0000 1.0000
147 0.0000 1.0000
148 0.0000 1.0000
149 0.0000 1.0000
150 0.0000 1.0000
151 0.0000 1.0000
152 0.0000 1.0000
153 0.0000 1.0000
154 0.0000 1.0000
155 0.0000 1.0000
156 0.0000 1.0000
157 0.0000 1.0000
158 0.0000 1.0000
159 0.0000 1.0000
160 0.0000 1.0000
161 0.0000 1.0000
162 0.0000 1.0000
163 0.0000 1.0000
164 0.0000 1.0000
165 0.0000 1.0000
166 0.0000 1.0000
167 0.0000 1.0000
168 0.0000 1.0000
169 0.0000 1.0000
170 0.0000 1.0000
171 0.0000 1.0000
172 0.0000 1.0000
173 0.0000 1.0000
174 0.0000 1.0000
175 0.0000 1.0000
176 0.0000 1.0000
177 0.0000 1.0000
178 0.0000 1.0000
179 0.0000 1.0000
180 0.0000 1.0000
181 0.0000 1.0000
182 0.0000 1.0000
183 0.0000 1.0000
184 0.0000 1.0000
185 0.0000 1.0000
186 0.0000 1.0000
187 0.0000 1.0000
188 0.0000 1.0000
189 0.0000 1.0000
190 0.0000 1.0000
191 0.0000 1.0000
192 0.0000 1.0000
193 0.0000 1.0000
194 0.0000 1.0000
195 0.0000 1.0000
196 0.0000 1.0000
197 0.0000 1.0000
198 0.0000 1.0000
199 0.0000 1.0000
200 0.0000 1.0000
201 0.0000 1.0000
202 0.0000 1.0000
203 0.0000 1.0000
204 0.0000 1.0000
205 0.0000 1.0000
206 0.0000 1.0000
207 0.0000 1.0000
208 0.0000 1.0000
209 0.0000 1.0000
210 0.0000 1.0000
211 0.0000 1.0000
212 0.0000 1.0000
213 0.0000 1.0000
214 0.0000 1.0000
215 0.0000 1.0000
216 0.0000 1.0000
217 0.0000 1.0000
218 0.0000 1.0000
219 0.0000 1.0000
220 0.0000 1.0000
221 0.0000 1.0000
222 0.0000 1.0000
223 0.0000 1.0000
224 0.0000 1.0000
225 0.0000 1.0000
226 0.0000 1.0000
227 0.0000 1.0000
228 0.0000 1.0000
229 0.0000 1.0000
230 0.0000 1.0000
231 0.0000 1.0000
232 0.0000 1.0000
233 0.0000 1.0000
234 0.0000 1.0000
235 0.0000 1.0000
236 0.0000 1.0000
237 0.0000 1.0000
238 0.0000 1.0000
239 0.0000 1.0000
240 0.0000 1.0000
241 0.0000 1.0000
242 0.0000 1.0000
243 0.0000 1.0000
244 0.0000 1.0000
245 0.0000 1.0000
246 0.0000 1.0000
247 0.0000 1.0000
248 0.0000 1.0000
249 0.0000 1.0000
250 0.0000 1.0000
251 0.0000 1.0000
252 0.0000 1.0000
253 0.0000 1.0000
254 0.0000 1.0000
255 0.0000 1.0000
256 0.0000 1.0000
257 0.0000 1.0000
258 0.0000 1.0000
259 0.0000 1.0000
260 0.0000 1.0000
261 0.0000 1.0000
262 0.0000 1.0000
263 0.0000 1.0000
264 0.0000 1.0000
265 0.0000 1.0000
266 0.0000 1.0000
267 0.0000 1.0000
268 0.0000 1.0000
269 0.0000 1.0000
270 0.0000 1.0000
271 0.0000 1.0000
272 0.0000 1.0000
273 0.0000 1.0000
274 0.0000 1.0000
275 0.0000 1.0000
276 0.0000 1.0000
277 0.0000 1.0000
278 0.0000 1.0000
279 0.0000 1.0000
280 0.0000 1.0000
281 0.0000 1.0000
282 0.0000 1.0000
283 0.0000 1.0000
284 0.0000 1.0000
285 0.0000 1.0000
286 0.0000 1.0000
287 0.0000 1.0000
288 0.0000 1.0000
289 0.0000 1.0000
290 0.0000 1.0000
291 0.0000 1.0000
292 0.0000 1.0000
293 0.0000 1.0000
294 0.0000 1.0000
295 0.0000 1.0000
296 0.0000 1.0000
297 0.0000 1.0000
298 0.0000 1.0000
299 0.0000 1.0000
300 0.0000 1.0000
301 0.0000 1.0000
302 0.0000 1.0000
303 0.0000 1.0000
304 0.0000 1.0000
305 0.0000 1.0000
306 0.0000 1.0000
307 0.0000 1.0000
308 0.0000 1.0000
309 0.0000 1.0000
310 0.0000 1.0000
311 0.0000 1.0000
312 0.0000 1.0000
313 0.0000 1.0000
314 0.0000 1.0000
315 0.0000 1.0000
316 0.0000 1.0000
317 0.0000 1.0000
318 0.0000 1.0000
319 0.0000 1.0000
320 0.0000 1.0000
321 0.0000 1.0000
322 0.0000 1.0000
323 0.0000 1.0000
324 0.0000 1.0000
325 0.0000 1.0000
326 0.0000 1.0000
327 0.0000 1.0000
328 0.0000 1.0000
329 0.0000 1.0000
330 0.0000 1.0000
331 0.0000 1.0000
332 0.0000 1.0000
333 0.0000 1.0000
334 0.0000 1.0000
335 0.0000 1.0000
336 0.0000 1.0000
337 0.0000 1.0000
338 0.0000 1.0000
339 0.0000 1.0000
340 0.0000 1.0000
341 0.0000 1.0000
342 0.0000 1.0000
343 0.0000 1.0000
344 0.0000 1.0000
345 0.0000 1.0000
346 0.0000 1.0000
347 0.0000 1.0000
348 0.0000 1.0000
349 0.0000 1.0000
350 0.0000 1.0000
351 0.0000 1.0000
352 0.0000 1.0000
353 0.0000 1.0000
354 0.0000 1.0000
355 0.0000 1.0000
356 0.0000 1.0000
357 0.0000 1.0000
358 0.0000 1.0000
359 0.0000 1.0000
360 0.0000 1.0000
361 0.0000 1.0000
362 0.0000 1.0000
363 0.0000 1.0000
364 0.0000 1.0000
365 0.0000 1.0000
366 0.0000 1.0000
367 0.0000 1.0000
368 0.0000 1.0000
369 0.0000 1.0000
370 0.0000 1.0000
371 0.0000 1.0000
372 0.0000 1.0000
373 0.0000 1.0000
374 0.0000 1.0000
375 0.0000 1.0000
376 0.0000 1.0000
377 0.0000 1.0000
378 0.0000 1.0000
379 0.0000 1.0000
380 0.0000 1.0000
381 0.0000 1.0000
382 0.0000 1.0000
383 0.0000 1.0000
384 0.0000 1.0000
385 0.0000 1.0000
386 0.0000 1.0000
387 0.0000 1.0000
388 0.0000 1.0000
389 0.0000 1.0000
390 0.0000 1.0000
391 0.0000 1.0000
392 0.0000 1.0000
393 0.0000 1.0000
394 0.0000 1.0000
395 0.0000 1.0000
396 0.0000 1.0000
397 0.0000 1.0000
398 0.0000 1.0000
399 0.0000 1.0000
400 0.0000 1.0000
No of Ordering cycles Holding cost per Yr Gamma Parameter: a Gamma Parmeter: b
12 $8 90.25 1.05

Markdown Price Per Unit Underbuy Cost Per-unit Overbuy Cost

$18 $20 $22

Marginal Benefit
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$232.00
$231.99
$231.99
$231.98
$231.96
$231.94
$231.90
$231.85
$231.77
$231.65
$231.47
$231.23
$230.89
$230.43
$229.82
$229.01
$227.97
$226.64
$224.99
$222.95
$220.47
$217.51
$214.01
$209.94
$205.26
$199.97
$194.04
$187.49
$180.34
$172.62
$164.39
$155.72
$146.68
$137.36
$127.85
$118.24
$108.64
$99.14
$89.83
$80.80
$72.11
$63.83
$56.02
$48.70
$41.92
$35.67
$29.98
$24.82
$20.20
$16.08
$12.43
$9.24
$6.46
$4.06
$1.99
$0.24
-$1.25
-$2.50
-$3.55
-$4.41
-$5.12
-$5.71
-$6.18
-$6.57
-$6.88
-$7.12
-$7.32
-$7.47
-$7.60
-$7.69
-$7.77
-$7.82
-$7.87
-$7.90
-$7.92
-$7.94
-$7.96
-$7.97
-$7.98
-$7.98
-$7.99
-$7.99
-$7.99
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
-$8.00
 12
Season Length 16
Season Demand 1600 10
Initial Buy 3300 8

Sales Lift Factor

Purchase Cost $40
$0 6
End of Season Salvage Price
Regular Price $60 4

2
Demand per week 100
0
0% 10% 20% 30% 40% 50% 60% 70% 80%
Weeks left 10
Markdown Percentage
Quantity Left at Markdown 2700

Markdown Sales lift factor Markdown Price Markdown Sales Markdown Revenue
5% 1.13 $57 1130 $64,410
10% 1.28 $54 1280 $69,120
15% 1.45 $51 1450 $73,950
20% 1.65 $48 1650 $79,200
25% 1.87 $45 1870 $84,150
30% 2.12 $42 2120 $89,040
35% 2.4 $39 2400 $93,600
40% 2.72 $36 2700 $97,200
45% 3.08 $33 2700 $89,100
50% 3.49 $30 2700 $81,000
55% 3.96 $27 2700 $72,900
60% 4.48 $24 2700 $64,800
65% 5.08 $21 2700 $56,700
70% 5.75 $18 2700 $48,600
75% 6.52 $15 2700 $40,500
80% 7.39 $12 2700 $32,400
85% 8.37 $9 2700 $24,300
90% 9.49 $6 2700 $16,200
95% 10.75 $3 2700 $8,100
% 40% 50% 60% 70% 80% 90% 100%
Markdown Percentage

Regular Sales Regular Revenue Total Season Sales Total Season Revenue Leftover Inventory
600 $36,000 1730 $100,410 1570
600 $36,000 1880 $105,120 1420
600 $36,000 2050 $109,950 1250
600 $36,000 2250 $115,200 1050
600 $36,000 2470 $120,150 830
600 $36,000 2720 $125,040 580
600 $36,000 3000 $129,600 300
600 $36,000 3300 $133,200 0
600 $36,000 3300 $125,100 0
600 $36,000 3300 $117,000 0
600 $36,000 3300 $108,900 0
600 $36,000 3300 $100,800 0
600 $36,000 3300 $92,700 0
600 $36,000 3300 $84,600 0
600 $36,000 3300 $76,500 0
600 $36,000 3300 $68,400 0
600 $36,000 3300 $60,300 0
600 $36,000 3300 $52,200 0
600 $36,000 3300 $44,100 0
 Max
$133,200 25 24 23 22 21 20
0.05
Salvage Revenue Final Revenue 0.1
$0 $100,410 0.15
$0 $105,120 0.2
$0 $109,950 0.25
$0 $115,200 0.3
Markdoen Percentage

$0 $120,150 0.35
$0 $125,040 0.4
$0 $129,600 0.45
$0 $133,200 0.5
$0 $125,100 0.55
$0 $117,000 0.6
$0 $108,900 0.65
$0 $100,800 0.7
$0 $92,700 0.75
$0 $84,600 0.8
$0 $76,500 0.85
$0 $68,400 0.9
$0 $60,300
$0 $52,200
$0 $44,100
 Weeks left
19 18 17 16 15 14 13 12 11 10 9 8 7
6 5 4 3 2 1