Albert is planning on selling Holiday fruitcakes through a website and having a third party fulfillment company handle the shipping and warehousing for him. He estimates that he will profit $50 for each unit that he sales. The problem is he must send all of his fruitcakes to the fulfillment company ahead of the holiday season and following the season any remaining fruitcakes will be donated to charity. He estimates that unsold fruitcakes will cost him $30 in total for all expenses. Based on last years sales he expects demand to be 411 fruitcakes with a standard deviation of 23 fruitcakes. If he behaves optimally how many fruitcakes will he send to the fulfillment company? Round to the nearest whole number.
Albert is planning on selling Holiday fruitcakes through a website and having a third party fulfillment company handle the shipping and warehousing for him. He estimates that he will profit $50 for each unit that he sales. The problem is he must send all of his fruitcakes to the fulfillment company ahead of the holiday season and following the season any remaining fruitcakes will be donated to charity. He estimates that unsold fruitcakes will cost him $30 in total for all expenses. Based on last years sales he expects demand to be 411 fruitcakes with a standard deviation of 23 fruitcakes. If he behaves optimally how many fruitcakes will he send to the fulfillment company? Round to the nearest whole number.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 36P
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Transcribed Image Text:Albert is planning on selling Holiday fruitcakes through a website and having a third party
fulfillment company handle the shipping and warehousing for him. He estimates that he will
profit $50 for each unit that he sales. The problem is he must send all of his fruitcakes to the
fulfillment company ahead of the holiday season and following the season any remaining
fruitcakes will be donated to charity. He estimates that unsold fruitcakes will cost him $30 in
total for all expenses. Based on last years sales he expects demand to be 411 fruitcakes with
a standard deviation of 23 fruitcakes. If he behaves optimally how many fruitcakes will he
send to the fulfillment company? Round to the nearest whole number.
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