Chapter 13: Single Period Perishable Demand Ordering Model (News Vendor) Assignment

A retailer has one opportunity to purchase a seasonal holiday product from the manufacturer for $120 each and will sell each product for $180. The forecasted demand for this seasonal product is expected to be normally distributed with a mean of 9000 units and a standard deviation of 2000. Products left over after the holiday will be sold to a discounter for $50.

1. Determine the expected order quantity that will maximize profits.
3. Calculate the following performance measure for the order quantity determined in question #1 above
   1. Expected inventory
   2. Expected sales
   3. Expected profit
   4. In-stock probability
   5. Stockout probability
4. Suppose the retailer orders 7000 products, what is the:
   1. Expected inventory
   2. Expected sales
   3. Expected profit
   4. In-stock probability
   5. Stockout probability
5. Suppose the retailer orders 10,000 products, what is the:
   1. Expected inventory
   2. Expected sales
   3. Expected profit
   4. In-stock probability
   5. Stockout probability

ALL formula values and calculations MUST be provided to receive ANY point credit.