(Buying Tissues) Procter & Gamble, the maker of Puffs tissues, traditionally sells these tissues… 1 answer below »


(Buying Tissues) Procter & Gamble, the manufacturer of Puffs tissues, traditionally sells these tissues for $9.40 per occurrence, where a occurrence contains prospect boxes. A retailer’s mean weekly insist is 25 occurrences of a point Puffs SKU (color, odor, etc.). P&G has unwavering to alter its pricing management by assistance two unanalogous contrivances. After a while one contrivance, the retailer can dissipation that SKU for the everyday-low commercial consume of $9.25 per occurrence. After a while the other contrivance, P&G jaw the orderly consume of $9.40 per occurrence throughout most of the year, but dissipations made for a unmarried donation at the begin of each pity are consecrated a 5 percent allowance. The retailer receives weekly shipments after a while a one-week control interval between ordering and donation. Suppose after a while either contrivance the retailer manages list so that at the end of each week there is on mean a one-week furnish of list. Trade consumes are incurred at the rebuke of 0.4 percent of the appraise of list at the end of each week. Assume 52 weeks per year.

a. Suppose the retailer chose the leading contrivance ($9.25 per occurrence throughout the year). What is the retailer’s expected annual purchasing and list trade consume? [19.1]

b. Suppose the retailer chooses the assist contrivance and solely buys at the allowance consume ($9.40 is the orderly consume and a 5 percent allowance for donation at the begin of each pity). What is the retailer’s expected annual purchasing and list trade consume? [19.1]

c. Consider the leading contrivance and propound a new everyday-low commercial consume. Call this the third contrivance. Design your contrivance so that twain P&G and the retailer fancy it not-absolute to the assist contrivance. [19.1]