Item12

10points

ItemSkipped

eBookReferences

Check my workCheck My Work button is now enabled3

Item 12

PA 13-2 (Algo) Flextrola, Inc., an electronics systems integrator, is...

Flextrola, Inc., an electronics systems integrator, is planning to design a key component for its next-generation product with Solectrics. Flextrola will integrate the component with some software and then sell it to consumers. Given the short life cycles of such products and the long lead times quoted by Solectrics, Flextrola only has one opportunity to place an order with Solectrics prior to the beginning of its selling season. Flextrolas demand during the season is normally distributed with a mean of 1,300 and a standard deviation of 600.

Solectrics production cost for the component is $52 per unit, and it plans to sell the component for $73 per unit to Flextrola. Flextrola incurs essentially no cost associated with the software integration and handling of each unit. Flextrola sells these units to consumers for $124 each. Flextrola can sell unsold inventory at the end of the season in a secondary electronics market for $52 each. The existing contract specifies that once Flextrola places the order, no changes are allowed to it. Also, Solectrics does not accept any returns of unsold inventory, so Flextrola must dispose of excess inventory in the secondary market

a.What is the probability that Flextrolas demand will be within 25% of its forecast? (Round your answer to 4 decimal places.)

b.What is the probability that Flextrolas demand will be more than 40% greater than Flextrolas forecast? Use Excel.(Round your answer to 4 decimal places.)

c.Under this contract, how many units should Flextrola order to maximize its expected profit?

d.If Flextrola orders 1400 units, how many units of inventory can Flextrolas expect to sell in the secondary electronics market? .(Round your answer to 2 decimal places.)

e.If Flextrola orders 1400 units, what are expected sales?(Round your answer to 2 decimal places.)

f.If Flextrola orders 1400 units, what is expected profit?(Round your answer to 2 decimal places.).