Question: 9. Consider the following demand scenario: Probability Quantity 2,000 2,100 2,200 2,300 2.400 2,500 2,600 2,700 3% 8% 15% 30% 17% 12% $ 10% 5%

9. Consider the following demand scenario:

9. Consider the following demand scenario: Probability Quantity 2,000 2,100 2,200 2,300 2.400 2,500 2,600 2,700 3% 8% 15% 30% 17% 12% $ 10% 5% Suppose the manufacturer produces at a cost of $20/unit. The distributor sells to end customers for $50/unit during season, unsold units are sold for $10/unit after season. c. Suppose the manufacturer is make-to-stock; that is, the timing of events is as follows: The manufacturer produces a certain amount. The distributor observes demand. The distributor orders from the manufacturer. i. Using the same wholesale price contract as part (b)(i), calculate the production/ inventory level of the manufacturer. What is the expected profit for the man- ufacturer and distributor? Compare your results with part (b)(i). ii. Find a cost-sharing contract such that both the manufacturer and distributor enjoy a higher expected profit that that in (c)(i), and calculate their expected profits

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