Answer: a trade discount
Explanation:
Based on the information that was provided, the type of discount or allowance could the approach that HP is contemplating be most clearly identified as a trade discount.
A trade discount simply refers to the scenario when a manufacturer reduces the retail price it sells its good to the wholesaler or the retailer. Since HP approached chain stores, then a trade discount is considered here.
A good way to become a systematic problem solver is to adopt the following five-step problem-solving process.
Identify the problem. This is critical: you must try to solve the right problem. ...
Analyze the problem. ...
Identify decision criteria. ...
Develop multiple solutions. ...
Choose the optimal solution.
The most likely answer here is B
Answer:
The optimal stocking level for the bakery is cakes 27.
Explanation:
Cost c = $ 7
Selling price p = $ 10
salvage value s = $ 5
Mean = 25
Standard deviation \sigma = 8
Cu = underage cost
= p-c
= $10 - $7
= $3
Co = overage cost
= c-s
= $7 - $5
= $2
P\leq C_{u}/(C_{u}+C_{o})
P\leq3/(3+2)
= 0.6
By using normsinv() function in excel we to find the correct critical value
The Z value for the probability 0.6 is 0.2533
The optimal stocking level is
=\mu +z\sigma
= 25 + 0.2533 *8
= 27.02
The optimal stocking level of bakery is 27.02
Therefore, The optimal stocking level for the bakery is cakes 27.
