Demand normal mean 7000 Your company produces healthy corn-based food. There is uncertainty in demand. stdev 1000 The demand in normal with mean 7000 and stand deviation 1000. Selling price is $8.5. Selling price $8.50 Unit variable $7.50 The unit variable cost is normally distributed with mean $7.5 and standard deviation $1. $1 Your company need to plan how much to produce before knowing the raw material price and the market demand. Leftover food cannot be stored for the next season and will be thrown away. What is the optimal amount of food to produce to maximize expected profit? (Vary from 2000 to 7000 with increment of 10( random variables Demand Hint: revenue = min(demand, amount of food to produce )*selling price Unit variable Cost = amount of food to produce* unit variable cost Decision 2000 revenue cost max everage profit profit optimal decision 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 3100 3200 3300 3400 3500 3600 3700 3800 3900 4000 4100 4200 4300 4400 4500 4600 BEEF 6 6 .. V O U A W N H 19 20 21 22 Sheet1 +