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Answer this ONLY using excel and show pictures Dr. Shockley is planning a SCMA 339 Holiday Ornament to commemorate the Fall class. Surprisingly, forecasted demand
Answer this ONLY using excel and show pictures Dr. Shockley is planning a SCMA 339 Holiday Ornament to commemorate the Fall class. Surprisingly, forecasted demand for these ornaments is normally distributed with a mean of 40,000 with a standard deviation of 15,000 units. The cost per ornament is $3.25 and are sold to students around the world for $10.50 each. All unsold ornaments are donated after the holidays without any tax deduction for Dr. S. How many ornaments should Dr. S tell his Indonesian supplier to produce? What is his expected profit? If the Indonesian manufacturer were to discount the price to Dr. S to $2.75 if he ordered at least 80,000 units should he do it? Justify your answer with profit estimates. Part 2: Alternatively, if Dr S, was offered a financial swap option contract to sell any unused ornaments to The Christmas Tree Shops for January Contract price of $3.50 but would incur a one-time fixed hedging cost of $3,000 at the beginning of the season to lock in this option, would this change the economics of the deal? Explain using your multi-channel financial analysis
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