Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each unit costs $150

Question:

Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each unit costs $150 to manufacture, and the introductory price is to be $200. At this price, the anticipated demand is normally distributed, with a mean of

μ = 100 and a standard deviation of σ = 40.

Any unsold units at the end of the season are unlikely to be valuable and will be disposed of in a fire sale for $50 each. It costs $20 to hold a unit in inventory for the entire season. How many units should Green Thumb manufacture for sale? What is the expected profit from this policy? On average, how many customers does Green Thumb expect to turn away because of stocking out?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Supply Chain Management

ISBN: 9780132743952

5th Edition

Authors: Sunil Chopra , Peter Meindl

Question Posted: