Question: For this question: Flextrola, Inc., an electronics systems integrator, is planning to replenish a key component, producedby Solectrics, for its next - generation product. Flextrola

For this question: Flextrola, Inc., an electronics systems integrator, is planning to replenish a key component, producedby Solectrics, for its next-generation product. Flextrola will integrate the component with some softwareand then sell it to consumers. Given the short life cycles of such products and the long lead times quotedby Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginningof its selling season. Flextrolas demand during the season is normally distributed with a mean of 1000and a standard deviation of 600. For each component Solectrics charges Flextrola c= $72. Flextrola sellsthese units to consumers for r= $121 each. Flextrola can sell unsold inventory at the end of the season ina secondary electronics market for s= $48 each. How many units should Flextrola order to maximize itsexpected profit? What is its expected profit? The answer is:
Q*=1266, E(Profit)= $33,162
Now answer: If Flextrola orders 1000 units, what is the expected revenue it can generate from the secondary electronics market? (Hint: Calculate the expected discounted sales first to find the secondary market revenue)
A. $8,567
B. $10,786
C. $11,490
D. $15,678

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!