2. Wine Drdering Kramer is a catalog retailer that offers a large collection of wines to its customers, who receive a catalog EVery two months from the company. For the wines to be listed in a catalog, Kramer has to forecast the demand several months before publishing the catalog and then place orders to the growers. The purchase price Kramer pays a grower is 50% of the list price. The grower is responsible for the cost of shipping wines to Kramer's warehouse. For a wine that cannot be sold during the regular catalog season, it is discounted by 40% of its retail price in future catalogs and it takes on average an additional 8 months before the wine can be sold. The warehouse operating cost is 0.1 Euro per month per bottle. The cost of capital of the company is 20% per year. If a wine is sold during the regular catalog season, the time it spends in warehousing is very short and can be assumed to be zero. Regardless of whether a wine is sold during the regular catalog season or not, Kramer pays 1 Euro per bottle for shipping and handling to fulfill customer orders. When stock-out occurs, the unsatisfied demand will be lost because it is not possible for Kramer to reorder during the catalog season. Kramer is planning for the next catalog. After analyzing the past data, Kramar believes that the demand for the wine Clunon can be represented by a normal distribution with mean 1f}, and standard deviation 3,0!)0. The list price of Cbinon is 10 Euro. How many bottles of Chinon should Kramer order from the grower? List price of Chinon {p} = 10 Cost (c) = 1-35 {50% of the list price) Cu (Underage Cost) = p c = 11] - E5 = 25 Salvage Value (5) = 'i'r x Ell] (4M6 discount of retail price) 0.1 x 8 (El months; 111; moruhrr bottle) 5 X 20% it 8112 = 4.53 Co (Overage Cost) = c s = (-25 - 4.53 = 0.43"