Johnson Electronics sells electrical and electroniccomponents through catalogs. Catalogs are printedonce every two years. Each printing run incurs a fixedcost of $25,000, with a variable production cost of $5per catalog. Annual demand for catalogs is estimated to be normally distributed with a mean of 16,000 andstandard deviation of 4,000. Data indicates that, onaverage, each customer ordering a catalog generates aprofit of $35 from sales. Assuming that Johnson wantsonly one printing run in each two-year cycle, howmany catalogs should be printed in each run?

Johnson Electronics sells electrical and electroniccomponents through catalogs. Catalogs are printedonce every two years. Each printing run incurs a fixedcost of $25,000, with a variable production cost of $5per catalog. Annual demand for catalogs is estimated to be normally distributed with a mean of 16,000 andstandard deviation of 4,000. Data indicates that, onaverage, each customer ordering a catalog generates aprofit of $35 from sales. Assuming that Johnson wantsonly one printing run in each two-year cycle, howmany catalogs should be printed in each run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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