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Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. The firm sells four designs, and currently, all packaging is done in the plant as chocolates are manufactured. All manufacturing and packaging for the holiday season are completed before the start of the season. The demand forecast for each of the four designs is normally distributed, with a mean m=10,000 and a standard deviation of s=6,000. Each box costs $15 and is sold for $30. Any unsold boxes are discounted by $9. The cost of holding a box in inventory is $1. What is the expected profit of this policy?

Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. The firm sells four designs, and currently, all packaging is done in the plant as chocolates are manufactured. All manufacturing and packaging for the holiday season are completed before the start of the season. The demand forecast for each of the four designs is normally distributed, with a mean m=10,000 and a standard deviation of s=6,000. Each box costs $15 and is sold for $30. Any unsold boxes are discounted by $9. The cost of holding a box in inventory is $1. What is the expected profit of this policy?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. The firm sells four designs, and currently, all packaging is done in the plant as chocolates are manufactured. All manufacturing and packaging for the holiday season are completed before the start of the season. The demand forecast for each of the four designs is normally distributed, with a mean m=10,000 and a standard deviation of s=6,000. Each box costs $15 and is sold for $30. Any unsold boxes are discounted by $9. The cost of holding a box in inventory is $1.

What is the expected profit of this policy?

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