Consider again the case wherethe WP focuses only on the production of papers and Ralph is responsible for selling the papers to the customers. But now assume thatRalph and WP want to use a buyback coordinating mechanism. If the production cost of each paper is $0.25, the wholesale price (i.e., the price that the WP charges Ralph for each paper) is $0.6 the retail price is $1 and the dailydemand is normally distributed with mean 500 and standard deviation 10 then,

Which buyback price, b, would maximize channel profit (i.e., which buyback price would coordinate the supply chain)?