1.What is the critical ratio under the following conditions:

Retail: $20

Cost: $3

Salvage: $2

Round to two decimal places.

2.As we practiced in class, the critical ratio of profitability is a ratio that I calculate out of (profit if I sell an item)/(loss if I don't sell that item).

Once we calculate our critical ratio, we look it up on the z-table and find the z-score associated with this ratio.

Assume that you've already taken these steps and found the z-score to be Z=1.82.

You've also tracked sales long enough to know that the demand's mean is 1,918 and that the standard deviation is 113.

According to the class discussion about bakery products and the Newsvendor problem we practiced in class, what quantity would you order to maximize your profit over time?

When deciding how to round, assume that you are a customer service-oriented company. Furthermore, when dealing with numbers this large, having .5 more on average is no big deal!

Please answer it step by step, thank you!