Question $2$a$)$ Old Production Process

Benetton first dyes yarns into various colors $(1$ week$),$ then knits them into finished

garments $(8$ weeks$)$

Due to the long knitting lead time, Benetton has to decide production quantities

before receiving customer orders

What is the optimal number of red and blue sweaters to produce, in order to

maximize Benetton's expected profit?

Hint: This is a newsvendor problem

Optimal number of blue sweaters

Optimal number of red sweaters