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3. AnyLogo supplies firms with apparel containing their logo to be used for promotional purposes. AnyLogo has four major customers: IBM, AT&T, HP, and Cisco.
3. AnyLogo supplies firms with apparel containing their logo to be used for promotional purposes. AnyLogo has four major customers: IBM, AT&T, HP, and Cisco. During the holiday season, the logos are adorned with a Christmas motif. Demand from each firm for apparel with the Christmas motif is normally distributed. The mean and standard deviation are provided in the table below. IBM AT&T H P Cisco Standard Dev. 2,000 2,500 2,000 2,200 AnyLogo currently produces all the apparel including the logo embroidery in Sri Lanka in advance for the holiday season. Each unit costs $10 and is sold by AnyLogo for $45. Any leftover inventory at the end of the holiday season is essentially worthless and cannot be repurposed for a different company, and is donated. Holding the apparel in inventory for the season costs $3 per donated unit. However, the donation allows AnyLogo to recover $5 per unit in tax savings. (a) What production quantities do you recommend for AnyLogo? (b) What is the probability that there will be no items to donate at the end of the holiday season? (c) What is the expected amount of stock left at the end of the holiday season? [Hintz Your textbook provides instructions on how to calculate the level of overstock and profit using Excel.]
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