Flextrola, Incorporated, an electronics systems integrator, is planning to design a key component for its next-generation product with Solectrics. Flextrola will integrate the component with some software and then sell it to consumers. Given the short life cycles of such products and the long lead times quoted by Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginning of its selling season. Flextrolas demand during the season is normally distributed with a mean of 1,200 and a standard deviation of 600. Use Table 13.4.

Solectrics production cost for the component is $52 per unit, and it plans to sell the component for $75 per unit to Flextrola. Flextrola incurs essentially no cost associated with the software integration and handling of each unit. Flextrola sells these units to consumers for $124 each. Flextrola can sell unsold inventory at the end of the season in a secondary electronics market for $49 each. The existing contract specifies that once Flextrola places the order, no changes are allowed to it. Also, Solectrics does not accept any returns of unsold inventory, so Flextrola must dispose of excess inventory in the secondary market.

a. What is the probability that Flextrolas demand will be within 25% of its forecast? Use Excel.

f. If Flextrola orders 1,200 units, what is expected profit?