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One of the items sold at a museum of natural history is a Christmas ornament carved of wood. The gift shop purchases the ornament from a vendor. The unit cost forall ornaments it orders depends on the number ordered. The quantity discount structure is as follows:
If the ornament is sold during the season, it is sold at $25 per ornament. When the season is over, the leftover ornaments can be sold back to the vendor for $5. The demand for ornaments has the following distribution:
Demand Quantity
Probability
0
0.01
1
0.03
2
0.08
3
0.14
4
0.18
5
0.17
6
0.15
7
0.10
8
9
0.05
10
Develop a spreadsheet to find the optimal order quantity (Q). Q can be any integer from 0 to 10.
(Hint: Use the Sam's Bookstore example as template)
Turn in a hardcopy of the Excel spreadsheet showing all the above requirements.Turn in a hardcopy of the Cost formula. Below is an example:The formula in B18 (total cost) is: =VLOOKUP(B9,D5:E9,2,TRUE)*B9
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