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Doc Nix Productions sells specialty T-Shirts that are sold at a single basketball game each. Doc Nix is trying to decide how many to buy

Doc Nix Productions sells specialty T-Shirts that are sold at a single basketball game each. Doc Nix is trying to decide how many to buy for an upcoming game. During the game itself, which lasts one evening, Doc can sell T-Shirts for $11 apiece. However, when the game ends unsold T-shirts have no value. Due to a licensing agreement, Doc needs to make sure that leftover shirts are destroyed using a method that ends up costing $0.25 for each unsold T-Shirt. It costs Doc $7.50 to buy a specialty T-Shirt from the supplier. The supplier he uses has a cost per shirt of $3. Doc estimates that demand is distributed as shown below.

Demand

325

350

375

400

425

450

Probability

0.10

0.15

0.10

0.20

0.25

0.20

Doc's supplier is contemplating "cutting out the middleman" (i.e., Doc Nix) and offering its products only through a direct channel. The cost and demand information are the same as in question 8. In this case, please answer the following:

How many specialty T-Shirts should the supplier produce to maximize profits?

Response: _________ T-shirts

Detailed calculations

What is the supplier's expected profit?

Response: $ _________ profit

Detailed calculations

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