Question
Gap sources a type of jacket from an Asian supplier for $124 apiece a few months before the selling season begins and sells them to
Gap sources a type of jacket from an Asian supplier for $124 apiece a few months before the selling season begins and sells them to customers for $182 apiece during the season. Leftover jackets at the end of season will be sold to an outlet mall at $92 apiece . The demand will be normally distributed with a mean of 5,231, and a standard deviation of 1500. In addition to jackets from Asia, Gap can buy additional jackets from a Mexican supplier who can produce the products quickly at $149 apiece after demand is known.
Suppose Gap only procures from the Mexican supplier after demand is known, what is Gap's expected profit?
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