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Great Bows ( GB ) is a manufacturer of high - end bows and sells their bows through Downtown Sporting Goods ( DSG ) retail
Great BowsGB is a manufacturer of highend bows and sells their bows through Downtown Sporting GoodsDSG retail store. Their topselling bow is called Sterling Demand for Sterling is assumed to follow a Normal distribution with a mean of and standard deviation of DSG sells the Sterling for $ during the hunting season. Once the hunting season is over DSG sells the unsold Sterlings to a discount sporting goods store for $ GBs unit manufacturing cost is $ GB is considering charging DSG either $ or $ or $ or $per unit.
a What unit price should GB charge to maximize its expected profit and how many units would DSG order at this price? Please round up all order sizes Hint: Think how many units DSG will buy at each price.
b If GB charges the price you came up with in part a above and DSG adopts a service level of
i What is DSGs optimal order size?
ii What is DSGs implied Goodwill cost?
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