Question: ( ii ) To maximize the supply chain s total profit ( SJ s profit plus Cusano s profit ) , how many grills should

(ii) To maximize the supply chains total profit (SJs profit plus Cusanos profit), how many grills
should be shipped to Cusanos hardware? (10 points)
(a)5.79
(b)8.03
(c)10.00
(d)11.23
(e)14.21
(iii) Suppose SJ and Cusano agree on the following revenue sharing contract: the wholesale price is $80
(as opposed to $185 in the original contract) and the per-unit revenue of $250 is shared with SJ; that is,
Cusano keeps $250(1-y) and SJ keeps $250y of the revenue per grill. To achieve the first-best profit in
part b, what should y be?(10 points)
(a)0.2
(b)0.4
(c)0.6
(d)0.8
(e)1.0

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