Solution-How many lights should LPS order

How many lights should LPS order

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Reference no: EM133430421

A producer sells a certain type of LED light to LPS, a local hardware store, at $12 each. The marginal production cost for the producer is $1 per item. LPS prices the lights at $24 and expects demand to be normally distributed with a mean of 20,000 and a standard deviation of 5,000. LPS places a single order with the producer. Currently, LPS discounts any unsold lights at the end of two months down to $3, and any lights that did not sell at full price sell at this price.

- How many lights should LPS order?

- What is LPS's expected profit?

- How many lights does LPS expect to sell at a discount?

- What is the expected understock?

- What is the producer's expected profit?

- What is the supply chain's profit?

Reference no: EM133430421

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How many lights should LPS order

Reference no: EM133430421

Reference no: EM133430421

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