Question: 1 . A hardware store buyer is deciding how many snow - blowers to purchase from a supplier. Each unit costs $ 3 5 0

1. A hardware store buyer is deciding how many snow-blowers to purchase from a supplier. Each unit costs $350 and sells for $650, with units left over at the end of the season marked down to $300. Expected demand is estimated to be 2,500 units with a standard deviation of 300. How many snow-blowers should the buyer order, how many will be expected to sell, and how much will the store expect to lose due to markdowns?
2. A distributor can supply the same snow-blower at a cost of $400/unit, but their shorter lead time would permit a mid-season order to be placed. If the buyer has forecast initial demand to be 800 snow-blowers with a standard deviation of 200, how many units should they order, and how much inventory should be expected from this initial order?
3. The buyer decided to order from the distributor in question 2, but a mild winter means that expected demand for the remainder of the season will be 1,200 snow-blowers with a standard deviation of 100. How many additional units should be purchased, and what is the expected profit for the full season? (Hint: Dont forget how the first order worked out).

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