A greeting-card company is trying to determine how many Valentines Day greeting cards to produce. The cost
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A greeting-card company is trying to determine how many Valentine’s Day greeting cards to produce. The cost of printing x cards is $2 million + 0.70x. For example, printing 1 million cards costs $2.7 million. Demand for cards follows a normal random variable with a mean of 2 million and a standard deviation of 400,000. The cards are sold for $4.00, and leftover cards have a value of $0.05. Among the production quantities of 2.4, 2.6, 2.8, 3, or 3.2 million, which production quantity maximizes the company’s expected profit?
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Related Book For
Microsoft Excel Data Analysis And Business Modeling
ISBN: 9780137613663
7th Edition
Authors: Wayne Winston
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