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Specialty Toys faces decision of how many teddy bear units to order for the coming holiday season. Members of management team recommended order quantities of

Specialty Toys faces decision of how many teddy bear units to order for the coming holiday season. Members of management team recommended order quantities of 15,000, 18,000, 24,000, and 28,000. The product management team has asked you for an analysis of the stock-out probabilities for various order quantities, an estimate of profit potential, and help in making an order quantity recommendation. Specialty expects to sell teddy bears for $24, and the cost is $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing sales history of similar products, Specialty's senior sales forecaster predicted an expected demand of 20,000 units with a 0.95 probability that demand would be between 10,000 units and 30,000 units.

Compute the probability of a stock-out for the order quantities suggested by members of the management team.

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