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Part 1 : Dr . Shockley is planning a SCMA 3 3 9 Holiday Ornament to commemorate the Fall class. Surprisingly, forecasted demand for these
Part :
Dr Shockley is planning a SCMA Holiday Ornament to commemorate the Fall class. Surprisingly, forecasted demand for these ornaments is normally distributed with a mean of with a standard deviation of units. The cost per ornament is $ and are sold to students around the world for $ each. All unsold ornaments are donated after the holidays without any tax deduction for Dr S How many ornaments should Dr S tell his Indonesian supplier to produce? What is his expected profit? If the Indonesian manufacturer were to discount the price to Dr S to $ if he ordered at least units should he do it Justify your answer with profit estimates.
Part :
Alternatively, if Dr S was offered a financial swap option contract to sell any unused ornaments to The Christmas Tree Shops for January Contract price of $ but would incur a onetime fixed hedging cost of $ at the beginning of the season to lock in this option, would this change the economics of the deal? Explain using your multichannel financial analysis.
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