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telo118 [61]
3 years ago
15

Calculate the expected cost per stockout with the following information: Probability of a back order is 50%, lost sale is 25%, a

nd the probability of a lost customer is 25%. The cost per incident of a back order is $150, lost customer is $250,000. Sales price of the item is $1,500 with a 20% profit margin. The average order is 50.
a) $250,000
b) $150
c) $15,000
d) $66,325
e) None of the above
Business
1 answer:
S_A_V [24]3 years ago
6 0

Answer:

D) $66,325

Explanation:

the total costs associated with a stockout are:

  • probability of a back order 50% x cost of a back order $150 = $75
  • probability of a lost consumer 25% x cost of a lost consumer $250,000 = $62,500
  • lost gross margin = probability of a lost consumer 25% x $1,500 x 50 units x 20% = $3,750

total costs of a stockout = $75 + $62,500 + $3,750 = $66,325

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Answer:

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7 0
3 years ago
Please help!!! I need help ASAP!
34kurt
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