What is Flextrola's expected profit V(Q) and its 95% confidence interval (CI)? Hint: 95% confidence interval CI is calculated by CONFIDENCE(0.05,standard deviation, sample size).

Upper CI = Expected Profit + 95% CI

Lower CI = Expected Profit 95% CI

Flextrola, a case for the newsvendor model Flextrola, Inc., an electronic systems integrator, is planning to design key components for their next generation product with Solectrics. Flextrola will integrate the components with software and then sell it to consumers. Given the short life cycles of such products and the long lead time quoted by Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginning of its selling season. Flextrola's demand during the season is normally distributed with a mean of 1000 and a standard deviation of 600. Solectrics' production cost for the component is $52 per unit, and it plans to sell the component for $72 per unit to Flextrola. Flextrola incurs $5 cost associated with the software integration and handling of each unit. Flextrola sells these units to consumers for $121 each. Flextrola can sell unsold inventory at the end of the season in a secondary electronics market for $50 each. The existing contract specifies that once Flextrola places the inventory, no changes are allowed. Also, Solectrics does not accept any returns of unsold inventory, so Flextrola must dispose of excess inventory in the secondary market. Part I (5 points): Use a simulation model to answer the following questions. Assume sample size n = 1000, and Flextrola orders Q = 1200 units. 1. What is Flextrola's in-stock probability? 2. What is Flextrola's fill rate? 3. What is Flextrola's expected profit V(Q) and its 95% confidence interval (CI)? Hint: 95% confidence interval CI is calculated by CONFIDENCE(0.05, standard deviation, sample size)" SEP Upper CI = Expected Profit + 95% CISE Lower CI = Expected Profit - 95% CI 4. What is Solectrics' expected profit G(Q)? 5. By the contract, the menu of order quantities that Flextrola can order from is Q {1000, 1100, 1200, 1300, 1400, 1500, 1600}. Which order quantity would maximize the expected profit of Flextorla? [Hint: for each Q = 1000, 1100, ..., 1600, run a simulation to find the profit V(S) and its CI. Then plot the curve VQ) and CI for each Q and consider both when making your Flextrola, a case for the newsvendor model Flextrola, Inc., an electronic systems integrator, is planning to design key components for their next generation product with Solectrics. Flextrola will integrate the components with software and then sell it to consumers. Given the short life cycles of such products and the long lead time quoted by Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginning of its selling season. Flextrola's demand during the season is normally distributed with a mean of 1000 and a standard deviation of 600. Solectrics' production cost for the component is $52 per unit, and it plans to sell the component for $72 per unit to Flextrola. Flextrola incurs $5 cost associated with the software integration and handling of each unit. Flextrola sells these units to consumers for $121 each. Flextrola can sell unsold inventory at the end of the season in a secondary electronics market for $50 each. The existing contract specifies that once Flextrola places the inventory, no changes are allowed. Also, Solectrics does not accept any returns of unsold inventory, so Flextrola must dispose of excess inventory in the secondary market. Part I (5 points): Use a simulation model to answer the following questions. Assume sample size n = 1000, and Flextrola orders Q = 1200 units. 1. What is Flextrola's in-stock probability? 2. What is Flextrola's fill rate? 3. What is Flextrola's expected profit V(Q) and its 95% confidence interval (CI)? Hint: 95% confidence interval CI is calculated by CONFIDENCE(0.05, standard deviation, sample size)" SEP Upper CI = Expected Profit + 95% CISE Lower CI = Expected Profit - 95% CI 4. What is Solectrics' expected profit G(Q)? 5. By the contract, the menu of order quantities that Flextrola can order from is Q {1000, 1100, 1200, 1300, 1400, 1500, 1600}. Which order quantity would maximize the expected profit of Flextorla? [Hint: for each Q = 1000, 1100, ..., 1600, run a simulation to find the profit V(S) and its CI. Then plot the curve VQ) and CI for each Q and consider both when making your