Focused on the clothing category among the four product lines of AWC.

In this category, there are several product types. We will be focusing only on the following three products:

Sport-100 Helmet, Black

Sport-100 Helmet, Blue

Sport-100 Helmet, Red

The production manager at AWC has asked Linda to analyze her sales data and determine order quantities (production quantities) for each helmet type (black, blue, and red) for the next month. Linda would like to start her analysis with an order quantity (stated as model production quantity in the excel sheet) of 2 units for each product. Your job is to consult Linda about how to model the uncertain demand for each helmet type.

1) Please discuss the methods that could be used for modeling the demand for each helmet type considered in this problem. Which method would make more sense in this situation?

2) Please use resampling to model the demand of each helmet type and perform 5000 simulation replications.

a) What is the mean total profit that you obtained?

b) What is the standard deviation of the total profit?

c) Obtain a 95% confidence interval around the total profit.

d) If Linda had a chance to gather more information about a particular helmet type to be able to predict the total profit better, what would that helmet type be?

e) What is the probability that the total profit will be more than $0?

f) What is the probability that the total profit will be less than $40?

3) Please use the “fitting” approach of ASP to find a particular probability distribution to model the demand of each helmet type. Choose a discrete distribution and use AIC/BIC statistics. Perform 5000 simulation replications.

a) What distribution did you find for black helmet type?

b) What distribution did you find for blue helmet type?

c) What distribution did you find for red helmet type?

d) Please perform the tasks in question 2 from (a) to (f).

4) Do you see significant differences between the results that you obtained in Question 2 and in Question 3? If so, why do you think the reason might be?