Following the lead of big online chains such as Amazon, the online store will also offer daily online groceries for its customers. These items are organized in a "grocery basket" with fruits, vegetables, and pantries. Items that are not sold in a day are lost. Each grocery basket costs $57 to arrange and it is priced at $127. The demand is Normally distributed, and the simulation for three days yielded the following results:

Day	Demand
1	25
2	32
3	22

(a) Based solely on the results of the simulation, what is the optimal number of baskets to arrange per day, and what is the resulting profit?

(b) Suppose now that the mean and standard deviation of the demand are 22 and 5, respectively. Based solely on the distribution, what is the optimal number of baskets that maximizes expected profit? Using this solution, what is the resulting profit for the three days in the simulation?

(c) Which solution was better, and why? Based on your answers, how would you solve the problem of finding the best number of baskets to prepare per day?

Inventory Management