Discount channel and a high-service channel

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Question: The GoGo Bunny is a hot toy this Christmas, and the manufacturer has decided to ration supply to all retailers. A large retail chain owns two channels-a discount channel and a high-service channel.

The retailer plans to sell the toy at a margin of $8 in the discount channel and a margin of $12 in the high-service channel. The manufacturer sends 100,000 GoGo Bunnies to the retailer. The retailer has forecast that the demand for the toy at the high-service channel is normally distributed, with a mean of 85,000 and a standard deviation of 20,000. How many toys should the retailer send to the discount channel?

Reference no: EM132897273

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