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Prado , a luxury fashion retailer , is gearing up to launch a limited - edition designer handbag . The company's goal is to maximize

Prado , a luxury fashion retailer , is gearing up to launch a limited - edition designer handbag . The company's goal is to maximize profits while also ensuring a high level of customer satisfaction , which is defined as being able to fulfill at least 90% of customer orders . As an operations analyst at Prado , your task is to use the Newsvendor model to recommend the optimal inventory level for these handbags in the upcoming season . This decision should take into account both profitability and the desired service level . You have the following information : Demand Characteristics : The demand is normally distributed , with a mean () of 10,000 units and a standard deviation () of 200 units . Financial Details : The cost per hand bag is $ 700, seling price is per handbag is $ 1,000, and the clearance price for unsold handbags at the end of the season is $ 200.

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