For the coming season, Savannah Bee Company plans to introduce a new product called Orange Blossom

Honey. Savannah Bee faces the decision of how many units of Orange Blossom Honey to produce for the

coming holiday season.

Members of the management team recommended production quantities of 1,500, 1,800, 2,400, and 2,800.

The different production quantities reflect considerable disagreement regarding the market potential of the

new product. The product management team has contracted you for an analysis of the stock out

probabilities for various production quantities, an estimate of the profit potential, and to help make a

production quantity recommendation.

Savannah Bee expects to sell Orange Blossom Honey for $20, and the cost is $11 per unit. If inventory

remains after the holiday season, Savannah Bee will sell all surplus inventory for $10 per unit. After

reviewing the sales history of similar products, Savannah Bee's senior sales forecaster predicted an

expected demand of 2,000 units with a 0.9 probability that demand would be between 1,000 units and

3,000 units.

a. Please use sales forecaster's prediction to describe a normal probability distribution that

can be used to approximate the demand distribution. Compute the normal distribution's standard

deviation.

b.Once you have approximated the demand using a normal distribution, please compute

the probabilities of a stock out for the production quantities suggested by members of the

management team.

c. Assuming three cases scenarios (i.e., worse case with a sales quantity of 1,000 units;

most likely case with a sales quantity of 2,000 units; and best case with a sales quantity of 3,000

units), please figure out the projected profit for the production quantities suggested by the

management team.

These questions need to be answered with Excel formulas