Essay
Exhibit 10-2
A large apparel company wants to determine the profitability of one of its most popular products, a particular type of jacket. Demand is uncertain, due to economic conditions, competition, weather and other factors, and the following probability distributions have been estimated for each of the company's three regions:
-Refer to Exhibit 10-2.Finally,suppose the apparel company receives an uncertain fraction of the total retail revenue from its retailers,modeled as a Triangular(0.70,0.75,0.80)distribution,and then must subtract production and operations costs,which are modeled as a Lognormal distribution with mean of $1,000,000 and standard deviation of $300,000.In that case,what is the expected net profit from the jacket line
Correct Answer:
Verified
Correct Answer:
Verified
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