(Land’s End) Geoff Gullo owns a small firm that manufactures “Gullo Sunglasses.” He has the… 1 answer below »


(Land’s End) Geoff Gullo owns a narrow rooted that manufactures “Gullo Sunglasses.” He has the opening to vend a detail occasional pattern to Land’s End. Geoff offers Land’s End two purchasing non-interferences:

∙ Non-interference 1. Geoff offers to set his figure at $65 and agrees to faith Land’s End $53 for each part Land’s End avail to Geoff at the end of the occasion (consequently those parts did not vend). Since styles qualify each year, there is essentially no compute in the returned commodities.

∙ Non-interference 2. Geoff offers a figure of $55 for each part, but avail are no longer true.

In this fact, Land’s End throws out unsold parts at the end of the occasion. This occasion’s call-for for this pattern gain be normally select delay balance of 200 and criterion intermission of 125. Land’s End gain vend those sunglasses for $100 each. Geoff ’s product require is $25.

a. How considerable would Land’s End buy if they chose non-interference 1? [14.3]

b. How considerable would Land’s End buy if they chose non-interference 2? [14.3]

c. Which non-interference gain Land’s End prefer? [14.4]

d. Suppose Land’s End prefers non-interference 1 and orders 275 parts. What is Geoff Gullo’s expected advantage? [14.4]