Question: A store is making a production decision for one limited collection of clothes to be sold at the store during the next two months. There

A store is making a production decision for one limited collection of clothes to be sold at the store during the next two months. There is a one-time fixed cost of $1000 to start the production of the clothes. The variable cost to produce each dress is $120. The dress will be sold at the store for $300 during the selling season. After that, any unsold clothes will be sold at an outlet at 80% discount from the original price tag, and it is expected that all remaining clothes can be sold at the outlet. The distribution of demand for the cloth during the selling season is given below. Demand Probability 16 0.1 17 0.15 18 0.4 19 0.2 20 0.15

1) The store would like to determine the optimal production quantity of the cloth. (1.1) What is the underage cost for the cloth? Please answer in number only. (1.2) What is the overage cost for the cloth? Please answer in number only. (1.3) How many clothes should the store produce to maximize its profit? Please answer in number only. 2) Suppose the variable cost for each cloth is $150. (2.1) What is the underage cost for the cloth? Please answer in number only. (2.2) What is the overage cost for the cloth? Please answer in number only. (2.3) How many clothes should the store produce to maximize its profit? Please answer in number only. 3) Suppose the full price during the selling season is $400 (3.1) What is the underage cost for the cloth? Please answer in number only. (3.2) What is the overage cost for the cloth? Please answer in number only. (3.3) How many clothes should the store produce to maximize its profit? Please answer in number only.

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