How many units of ice cream maker should beyondbest order

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Reference no: EM133441318

Case Study: As the summer season approaches, BeyondBest - a retail store - is planning to stock a new model of ice cream maker at its store. The retail price for this ice cream maker will be set at $28. BeyondBest purchases this product directly from the manufacturer who sells each ice cream maker to BeyondBest for $20. Each ice cream maker costs the manufacturer $7.5 to make. The demand for this ice cream maker at BeyondBest for the upcoming summer season is estimated to be normally distributed with a mean of 100 and a standard deviation of 42.

At the end of the summer season, BeyondBest will sell any remaining inventory of the ice cream maker at the clearance price of "75% Off" from the original retail price.

Questions:

  • How many units of the ice cream maker should BeyondBest order to maximize its expected profit?
  • What is the manufacturer's profit (in $) if BeyondBest orders the quantity in the above

 

Reference no: EM133441318

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