1) Assume weekly demand is normally distributed with mean 9 and standard deviation 3
2) There are 26 rental opportunities in a season. Snow shoes are rented for $40
3) The average lifespan of snowshoes is 5 years
4) REI charges a 67% markup; snowshoes retail price is $200
What is the cost of having having a pair of snow shoes go unrented for a weekend of their useful life? (Think overage)
What is the “cost” of not having a snowshoe that someone can rent (ignore that the person might instead buy a snowshoe and just focus on lost rental revenue).
What is the profit-maximizing service level for rental snowshoes
How many rental snowshoes should they stock?