Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 13

The demand for next year's wildlife calendar at a bookstore is assumed to be normally distributed with a mean of 500 and a standard deviation of 75. Each calendar costs the bookstore $5.50 each and will be sold for $12.50 each. Any calendars remaining for sale after Christmas will be discounted and sold for $1.00 each. The bookstore believes that any calendar remaining to be sold after Christmas can be cleared at the $1.00 price. How many wildlife calendars should the bookstore stock if it wants to maximize its expected profit from wildlife calendars?