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A supplier of seasonal products produces to stock and sells these products to a wholesaler. The wholesaler orders from the supplier a single order for
A supplier of seasonal products produces to stock and sells these products to a wholesaler. The wholesaler orders from the supplier a single order for delivery at the beginning of the season. This happens just after the wholesaler has observed its demand. The wholesale price is SAR 70 per product. At the end of the season, the supplier offers the remaining unsold products in the open market for SAR 5 per product. The supplier's financial department estimates the unit production cost at SAR 40 and the production setup cost at SAR 150,000. The wholesaler sells the products at SAR 129 per unit. The wholesaler yearly demand is normally distributed with a mean of 60.000 and standard deviation of 10,000. Use two decimals for all calculations.
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