Finance Assignment | Professional Writing
2. You are a retailer of computer systems. You buy computer system curveu moms uncuy from the manufacturer who sells these monitors to you for $120 per unit and your retail selling price is $160 per unit. The manufacturer’s cost is $90 per unit. The manufacturer offers you two alternatives: buyback or revenue sharing. The demand distribution is given below: Demand Probability 100 0.10 200 0.20 300 0.35 400 0.20 500 0.15 a. Buyback option: You still buy monitors for $120 per unit and sell for $160 per unit.
However, the manufacturer buys back unsold monitors from you at for $140 per unit. Compute the retailer’s profits, manufacturer’s profits, expected profits, and the supply chain expected profits for different order sizes. b. Revenue sharing: In order to save initial purchase cost, you as a retailer, agrees to share 15% of your revenue with the manufacturer who has agreed to sell monitors to you at a lower cost of $100 per unit rather than at $ 120 per unit. Compute the retailer’s profits, manufacturer’s profits, expected profits, and the supply chain expected profits for different order sizes.
Get Finance homework help today
