Quantity Discounts

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					                   A                        B             C           D          E          F          G      H           I      J
1    Ordering decision with quantity discounts
2
3    Inputs                                                       Quantity discount structure
4    Unit cost - see table to right                                 At least Unit cost
5    Regular price                                $30                      0    $24.00
6    Leftover price                               $10                  1000     $23.00
7                                                                      2000     $22.25
8    Decision variable                                                 3000     $21.75
9    Order quantity                              2500                  4000     $21.30
10
11   Uncertain quantity
12   Demand                                      2000
13
14   Profit model
15   Units sold at regular price
16   Units sold at leftover price
17   Revenue
18   Cost
19   Profit
20
21   Data table of profit as a function of order quantity (along side) and demand (along top)
22                                                  500       1000        1500      2000      2500     3000       3500    4000       4500
23                               500
24                              1000
25                              1500
26                              2000
27                              2500
28                              3000
29                              3500
30                              4000
31                              4500
32
33   Model of expected demands
34   Demand                                        500     1000        1500       2000          2500   3000       3500    4000        4500
35   Probability                                 0.025     0.05        0.15       0.25          0.25   0.15        0.07   0.04       0.015
36
37                    Order quantity   Expected profit

				
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posted:2/21/2012
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