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Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each unit costs $ 1 5 0 to manufacture, and the introductory
Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each unit costs $ to manufacture, and the introductory price is $ At this price, the anticipated demand is normally distributed, with a mean of
and a standard deviation of
Any unsold units at the end of the season will be disposed of in a postseason sale for $ each. It costs $ to hold a unit in inventory for the entire season. How many units should Green Thumb manufacture for sale? What is the expected profit from this policy? On average, how many customers does Green Thumb expect to turn away because of stocking out?
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