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The manufacturer produces each grill at a cost of CHF 75. They set the wholesale price for each grill at VHF 200. The hardware store

The manufacturer produces each grill at a cost of CHF 75. They set the wholesale price for each grill at VHF 200. The hardware store then sells the grills to customers at a retail price of CHF 250 during the outdoor season. However, at the end of the season, any remaining grills are sold by the hardware store at a discounted price of CHF 95. The manufacturer is considering implementing a buyback contract for the hardware store. Under this contract, the hardware store can return any unsold grills to the manufacturer at a price of CHF 140 per grill. However, the hardware store incurs a shipping cost of CHF 2.50 per grill for returning the grills to the manufacturer.

  1. Assuming that the wholesale price of CHF 185 remains constant throughout the season, and the retailer's demand for grills follows a normal distribution with a mean of 500 and a standard deviation of 125, what is the expected entire supply chains profit under the proposed buyback contract? (Round your answer to the nearest integer)
  2. What is the optimal buy-back price?
  3. What is the total profit of the entire supply chain when the optimal buy-back price is implemented under the buyback contrac

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