978-0134731889 Examples Table 13 - 5

Table 13-5 (Benetton) Simulation – Tailored postponement

Demand distribution

Mean, µSD, σSale price = 50$

Color 1 1,000 500 Option 1 cost = 20$

Color 2 1,000 500 Option 2 cost = 22$

Color 3 1,000 500 Clearance price = 10$

Color 4 1,000 500

Option 1 production quantity Q 1Option 2 production quantity Q A

QA

Quantity Q11,550

Color 1 800

Color 2 800

Color 3 800

Color 4 800

Expected Profit = 103,098$

SD of Profit = 31,656$

Average overstock = 728

Average understock = 180

Expected loss from clearance = 9,999$

Expected margin from sale = 113,097$

To construct Table 13-5, enter Q1in Cells B14 to B17 and QAin Cell

E13. The average profit from 500 simulations is shown in Cell C20,

the average overstock in Cell D22, and the average understock in

Cell D23. Press F9 to obtain results of new simulations.

Simulation

Demand Option 1 Unfilled demand Option 2 Clearance Sales Clearance loss Sales margin

Color 1 909 800 109 – 800 – 24,000

Color 2 1,248 800 448 – 800 – 24,000

Color 3 895 800 95 – 800 – 24,000

Color 4 510 800 – 290 510 2,900 15,300

Total 3,562 652 1,550 898 652 10,776 18,256

13,676 105,556

Tailored Sourcing

Profit = 91,880 Lost sales = –

overstock= 1,188

Random No Profit Clearance Margin Overstock Understock

191,880 13,676 105,556 1,188 –

119,160 5,746 124,906 506 –

81,160 16,908 98,068 1,456 –

135,320 1,224 136,544 102 –

82,560 16,048 98,608 1,421 –

77,320 18,160 95,480 1,552 –

139,400 – 139,400 -947 947

112,360 7,814 120,174 676 –

139,400 – 139,400 -1,256 1,256

96,640 12,042 108,682 1,069 –

78,520 17,784 96,304 1,522 –

135,440 990 136,430 -456 555

62,640 21,686 84,326 1,919 –

93,360 11,704 105,064 1,151 –

124,120 3,820 127,940 -501 883

128,240 2,790 131,030 156 123

51,200 24,410 75,610 2,205 –

89,360 13,996 103,356 1,251 –

139,400 – 139,400 -1,315 1,315

93,120 13,568 106,688 1,157 –

73,160 19,186 92,346 1,656 –

97,360 12,258 109,618 1,051 –

133,760 1,410 135,170 -800 941

53,160 23,514 76,674 2,156 –

88,400 14,336 102,736 1,275 –

76,880 16,816 93,696 1,563 –

71,240 18,498 89,738 1,704 –

96,880 12,272 109,152 1,063 –

110,600 7,200 117,800 69 651

103,560 9,616 113,176 896 –

134,560 1,210 135,770 76 45

115,200 6,928 122,128 605 –

93,600 13,488 107,088 1,145 –

89,720 13,486 103,206 1,242 –

88,840 13,878 102,718 1,264 –

139,400 – 139,400 -2,121 2,121

127,800 2,900 130,700 -252 542

124,760 3,660 128,420 353 13

87,280 14,960 102,240 1,303 –

120,960 4,728 125,688 461 –

76,000 17,420 93,420 1,585 –

103,560 10,752 114,312 896 –

41,440 27,590 69,030 2,449 –

125,440 3,566 129,006 349 –

92,320 12,444 104,764 1,177 –

136,200 800 137,000 -226 306

84,120 15,898 100,018 1,382 –

125,720 3,420 129,140 -600 942

22,360 32,360 54,720 2,926 –

114,080 7,592 121,672 633 –

127,840 2,890 130,730 -35 324

120,120 4,820 124,940 180 302

45,160 26,094 71,254 2,356 –

112,960 7,102 120,062 661 –

94,120 11,984 106,104 1,132 –

139,400 – 139,400 -208 208

139,400 – 139,400 -27 27

134,440 1,240 135,680 -238 362

139,400 – 139,400 -1,265 1,265

105,160 9,754 114,914 856 –

107,080 8,916 115,996 808 –

128,840 3,168 132,008 264 –

137,680 516 138,196 43 –

137,800 400 138,200 -3 43

139,400 – 139,400 -99 99

74,120 17,306 91,426 1,632 –

139,400 – 139,400 -1,107 1,107

101,800 9,638 111,438 940 –

78,880 17,488 96,368 1,513 –

139,400 – 139,400 -156 156

99,920 11,398 111,318 987 –

107,400 8,000 115,400 450 350

88,920 14,014 102,934 1,262 –

60,360 22,556 82,916 1,976 –

134,440 1,240 135,680 89 35

16,760 33,486 50,246 3,066 –

70,200 19,522 89,722 1,730 –

116,680 6,338 123,018 568 –

109,720 7,588 117,308 742 –

34,760 28,834 63,594 2,616 –

72,960 19,300 92,260 1,661 –

64,960 21,098 86,058 1,861 –

139,400 – 139,400 -584 584

41,880 27,402 69,282 2,438 –

85,960 14,484 100,444 1,336 –

125,720 3,420 129,140 294 48

47,200 25,726 72,926 2,305 –

121,280 4,920 126,200 453 –

139,400 – 139,400 -11 11

66,520 20,528 87,048 1,822 –

133,280 1,530 134,810 36 117

116,640 6,278 122,918 569 –

24,560 31,038 55,598 2,871 –

137,040 590 137,630 15 44

20,280 32,836 53,116 2,978 –

83,480 16,028 99,508 1,398 –

126,080 3,722 129,802 333 –

138,080 330 138,410 -366 399

123,080 4,080 127,160 -223 631

136,000 850 136,850 74 11

52,080 24,644 76,724 2,183 –

82,760 15,624 98,384 1,416 –

139,400 – 139,400 -42 42

56,400 22,792 79,192 2,075 –

67,160 19,982 87,142 1,806 –

109,600 8,146 117,746 745 –

130,480 2,666 133,146 223 –

123,960 3,860 127,820 210 176

86,280 15,010 101,290 1,328 –

119,720 4,920 124,640 -635 1,127

137,080 580 137,660 -735 793

115,920 7,044 122,964 587 –

78,960 15,760 94,720 1,511 –

139,400 – 139,400 -1,116 1,116

139,400 – 139,400 -613 613

36,000 28,426 64,426 2,585 –

63,600 20,590 84,190 1,895 –

58,560 22,434 80,994 2,021 –

136,840 640 137,480 -566 630

99,720 11,570 111,290 992 –

105,120 9,298 114,418 857 –

139,400 – 139,400 -550 550

110,680 8,380 119,060 718 –

89,080 14,478 103,558 1,258 –

139,400 – 139,400 -776 776

110,360 8,094 118,454 726 –

139,400 – 139,400 -570 570

110,280 7,280 117,560 686 42

122,920 4,616 127,536 412 –

120,400 5,330 125,730 475 –

87,280 14,752 102,032 1,303 –

94,200 13,144 107,344 1,130 –

116,640 6,596 123,236 569 –

122,600 4,788 127,388 420 –

58,840 23,002 81,842 2,014 –

139,400 – 139,400 -1,642 1,642

123,360 4,734 128,094 401 –

136,120 820 136,940 -9 91

127,600 3,274 130,874 295 –

139,400 – 139,400 -369 369

116,640 6,158 122,798 569 –

118,160 5,310 123,470 112 419

109,000 8,518 117,518 760 –

104,000 10,002 114,002 885 –

110,360 8,100 118,460 726 –

94,600 12,836 107,436 1,120 –

115,640 6,466 122,106 594 –

51,320 24,230 75,550 2,202 –

137,800 400 138,200 -38 78

102,400 9,494 111,894 925 –

101,160 9,872 111,032 956 –

78,280 17,348 95,628 1,528 –

64,600 20,370 84,970 1,870 –

63,960 20,814 84,774 1,886 –

139,400 – 139,400 -967 967

127,320 3,120 130,440 302 –

139,400 – 139,400 -310 310

78,280 16,836 95,116 1,528 –

107,400 8,000 115,400 236 564

76,400 17,830 94,230 1,575 –

45,440 25,990 71,430 2,349 –

-2,480 38,570 36,090 3,547 –

108,080 8,742 116,822 783 –

111,120 8,462 119,582 707 –

139,400 – 139,400 -429 429

107,720 8,422 116,142 792 –

126,040 3,630 129,670 334 –

118,960 6,132 125,092 511 –

54,840 22,168 77,008 2,114 –

57,200 23,506 80,706 2,055 –

122,480 4,230 126,710 -445 868

134,360 1,260 135,620 -957 1,083

139,400 – 139,400 -653 653

119,360 5,010 124,370 428 73

122,080 4,724 126,804 433 –

88,640 13,864 102,504 1,269 –

120,240 5,748 125,988 479 –

35,440 28,776 64,216 2,599 –

74,720 18,110 92,830 1,617 –

58,320 22,808 81,128 2,027 –

27,640 31,040 58,680 2,794 –

84,480 15,460 99,940 1,373 –

84,280 14,762 99,042 1,378 –

91,000 13,128 104,128 1,210 –

117,000 6,314 123,314 560 –

52,640 23,380 76,020 2,169 –

136,880 756 137,636 63 –

139,400 – 139,400 -1,669 1,669

59,480 22,624 82,104 1,998 –

122,040 4,524 126,564 434 –

106,400 9,454 115,854 825 –

101,720 9,420 111,140 940 2

139,400 – 139,400 -599 599

48,960 24,454 73,414 2,261 –

57,240 23,640 80,880 2,054 –

101,840 10,312 112,152 939 –

112,680 6,680 119,360 432 236

53,400 23,404 76,804 2,150 –

58,080 22,306 80,386 2,033 –

136,880 756 137,636 63 –

139,400 – 139,400 -1,072 1,072

118,520 5,220 123,740 220 302

81,240 15,504 96,744 1,454 –

125,240 3,540 128,780 -132 486

101,400 10,082 111,482 950 –

114,080 6,570 120,650 633 –

107,360 8,010 115,370 669 132

139,400 – 139,400 -173 173

95,040 12,966 108,006 1,109 –

37,880 28,480 66,360 2,538 –

80,560 17,178 97,738 1,471 –

83,680 14,504 98,184 1,393 –

68,640 20,110 88,750 1,769 –

30,640 29,724 60,364 2,719 –

57,840 22,602 80,442 2,039 –

115,600 5,950 121,550 180 415

125,920 3,370 129,290 -314 651

139,120 70 139,190 -264 271

84,720 15,354 100,074 1,367 –