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hardware store manager is planning purchases of gas furnaces. She has received quotes from two distributors. The first can only deliver prior to the start
hardware store manager is planning purchases of gas furnaces. She has received quotes from two distributors. The first can only deliver prior to the start of the season and charges $furnace The second distributor can deliver a first order prior to the start of the season and a second one a few weeks later, charging $furnace The manager plans to sell furnaces for $ If there is inventory at the end of winter, furnaces will be sold for $ If the manager were to order in advance for the full season, their plans will be based on expected demand of furnaces with a standard deviation of but if they only need to order initially for early season sales, they will order based on expected demand of furnaces and a standard deviation of How much will the manager expect to pay for furnaces for each of the two distributors? The manager hedged and purchased from the second distributor. Updated forecasts suggest it will be a relatively mild winter, and the manager anticipates expected demand for the rest of the season to be furnaces with a standard deviation of How many more furnaces should the manager order, and what will their expected profit be for the full season? Hint: Dont forget how the first order worked out
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