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    Chapter 15 Answers To Exercises

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    Tainá Melo
    This document provides solutions to exercises related to pricing and revenue management in supply chains. It includes 9 problems addressing topics like determining production capacity levels, setting optimal prices under constrained and unconstrained scenarios, and evaluating fixed versus dynamic pricing models. Non-linear optimization techniques like solver are used to find the profit-maximizing solutions under different objectives and constraints.

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    Chapter 15 Answers To Exercises

    Uploaded by

    Tainá Melo
    83 views5 pages
    This document provides solutions to exercises related to pricing and revenue management in supply chains. It includes 9 problems addressing topics like determining production capacity levels, setting optimal prices under constrained and unconstrained scenarios, and evaluating fixed versus dynamic pricing models. Non-linear optimization techniques like solver are used to find the profit-maximizing solutions under different objectives and constraints.

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    solucionário cap 15 Chopra

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    Chapter 15 Answers to Exercises.doc

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    This document provides solutions to exercises related to pricing and revenue management in supply chains. It includes 9 problems addressing topics like determining production capacity levels, setting optimal prices under constrained and unconstrained scenarios, and evaluating fixed versus dynamic pricing models. Non-linear optimization techniques like solver are used to find the profit-maximizing solutions under different objectives and constraints.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    83 views5 pages

    Chapter 15 Answers To Exercises

    Uploaded by

    Tainá Melo
    This document provides solutions to exercises related to pricing and revenue management in supply chains. It includes 9 problems addressing topics like determining production capacity levels, setting optimal prices under constrained and unconstrained scenarios, and evaluating fixed versus dynamic pricing models. Non-linear optimization techniques like solver are used to find the profit-maximizing solutions under different objectives and constraints.

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    You are on page 1of 5

    Chapter 15: Pricing and Revenue Management in a Supply Chain

    Exercise Solutions

    1.

    The amount of production capacity to reserve is:

    Q* = F-1 (p*, , ) = NORMINV(p*, , )

    p* = 1-(5/10) = 0.5

    NORMINV(0.5, 250, 100) = 250 units

    Worksheet 15-1 presents this solution.

    2.

    Just as in the case of the previous problem:

    Q* = F-1 (p*, , ) = NORMINV(p*, , )

    p* = 1-(4/8) = 0.5

    NORMINV(0.5, 400000,150000) = 400,000

    But since the manufacturer only sends 100,000 to the retailer, the amount to be sent to the high
    service channel is the minimum of 100,000 and 400,000. So only 100,000 units are sent to the
    high service channel.

    Worksheet 15-2 presents this solution.

    3.
    (a)

    Cw 3
    s* = = = 0.5
    Cw Cs 33

    O* = NORMINV(s*, c, c) = NORMINV(0.5, 20000, 10000) = 20000

    So, the total size of the contracts that the manager should sign is 20,000 square feet

    (b)

    O = NORMINV(0.5, 0.15(100000 + O), (0.6(0.15)(10000 + O)).

    The problem is solved by using solver by maximizing O subject to the restriction that O =
    NORMINV(0.5, 0.15(100000 + O), (0.6(0.15)(10000 + O)).

    O = 17,647 square feet

    1
    So, the total space that the manager should sign contracts for is 17,647 square feet
    Worksheet 15-3 presents this solution

    4.

    The amount of trucking capacity the manager should save for the spot market is given by:

    Q* = F-1 (p*, , ) = NORMINV(p*, , )

    p* = 1-(0.1/0.13) = 0.23

    NORMINV(0.23, 60000, 20000) = 45,274 units

    Worksheet 15-4 presents this solution.

    5.

    The size of the annual contract the manager should sign is given by:

    Q* = F-1 (p*, , ) = NORMINV(p*, , )

    p* = 1-(0.5/0.7) = 0.29

    NORMINV(0.29, 500000, 150000) = 415,108 square feet

    Worksheet 15-5 presents this solution.

    6.

    Unconstrained case:

    Decision variables:

    p1 = price that NatBike should charge customized segment

    p2 = price that NatBike should charge standard segment

    Objective:

    Maximize profit : (p1-200)(20000-10 p1) + (p2-200)(40000-30 p2)

    Subject to:

    (20000-10 p1) +(40000-30 p2) <= 400000 (this capacity will solve the unconstrained problem)

    p1, p2 >= 0

    Solving this problem results in p1 = $1,100 and p2 = $766.7 and a profit of $17,733,333

    2
    Worksheet 15-6 presents the solution to this problem using Solver. Note that this is a nonlinear
    model.
    Constrained case:

    The only difference for the constrained case is that we change the capacity constraint as shown
    below:

    (20000-10 p1) +(40000-30 p2) <= 20000

    Solving this problem results in p1 = $1,250 and p2 = $916.7 and a profit of $16,833,333

    7.

    The only change that we make here is with respect to the production costs as shown in bold.

    Unconstrained case:

    Decision variables:

    p1 = price that NatBike should charge customized segment

    p2 = price that NatBike should charge standard segment

    Objective:

    Maximize profit : (p1-300)(20000-10 p1) + (p2-200)(40000-30 p2)

    Subject to:

    (20000-10 p1) +(40000-30 p2) <= 400000 (this capacity will solve the unconstrained problem)

    p1, p2 >= 0

    Solving this problem results in p1 = $1,150 and p2 = $766.7 and a profit of $16,858,333

    Worksheet 15-7 presents the solution to this problem using Solver. Note that this is a non-linear
    model.
    Constrained case:

    The only difference for the constrained case is that we change the capacity constraint as shown
    below:

    (20000-10 p1) +(40000-30 p2) <= 20000

    Solving this problem results in p1 = $1,287.5 and p2 = $904.2 and a profit of $16,102,083

    Worksheet 15-7 presents the solution to this problem using Solver. Note that this is a nonlinear
    model.

    3
    8.

    In this case we allow for acquiring additional capacity at a cost

    Decision variables:

    p1 = price that NatBike should charge customized segment

    p2 = price that NatBike should charge standard segment

    c = additional capacity to acquire

    Objective:

    Maximize profit : (p1-200)(20000-10 p1) + (p2-200)(40000-30 p2) 25c

    Subject to:

    (20000-10 p1) +(40000-30 p2) <= 20000 + c

    p1, p2, c >= 0

    Solving this problem results in p1 = $1,112.5 and p2 = $779.2 and a profit of $17,589,583

    Worksheet 15-8 presents the solution to this problem using Solver. Note that this is a nonlinear
    model.

    9.

    Fixed price model:

    Decision variables:

    p = price charged during entire season for each swimsuit

    Objective:

    Maximize revenue: p(2000-10p) + p(2000-20p) + p(2000-30p) = p(6000-60p)

    Subject to:

    (2000-10p) + (2000-20p) + (2000-30p) <= 5000

    p >= 0

    Solving this problem results in p = $50 and total revenue of $150,000

    4
    Dynamic price model:

    Decision variables:

    p1 = price charged during the first month for each swimsuit

    p2 = price charged during the second month for each swimsuit

    p3 = price charged during the third month for each swimsuit

    Objective:

    Maximize revenue: p1(2000-10p1) + p2(2000-20p2) + p3(2000-30p3)

    Subject to:

    (2000-10p1) +(2000-20p1) + (2000-30p1) <= 5000

    p1, p2, p3 >= 0

    Solving this problem results in p1 = $100, p2 = $50, p3 = $33.33 and the total revenue is
    $183,333.

    Quantity model:

    Decision variables:

    p1 = price charged during the first month for each swimsuit

    p2 = price charged during the second month for each swimsuit

    p3 = price charged during the third month for each swimsuit

    q = quantity to purchase at the beginning of the season

    Objective:

    Maximize profit: p1(2000-10p1) + p2(2000-20p2) + p3(2000-30p3) 40q

    Subject to:

    (2000-10p1) +(2000-20p1) +(2000-30p1) <= q

    p1, p2, p3, q>= 0

    Solving this problem results in p1 = $120, p2 = $70, p3 = $53.33 and the total revenue is $87,333.

    Worksheet 15-9 presents the solution to this problem using Solver. Note that this is a nonlinear
    model.

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