The general manager at Green Thumb decides to conduct extensive market research for its new product. At the end of the market research, the manager estimates demand to be normally distributed, with a mean of μ =100 and a standard deviation of σ = 15.

How should Green Thumb alter its production plans in Exercise 1 as a result of the market research?

How much increase in profit is it likely to observe? How does the improved forecast affect the demand lost by Green Thumb because of understocking? Use cost and price information from Exercise 1.