Question: Johnson Electronics (JE) sells electrical and electronic components through catalogs. Catalogs are updated and printed twice every year. Each printing run incurs a fixed cost

Johnson Electronics (JE) sells electrical and electronic components through catalogs. Catalogs are updated and printed twice every year. Each printing run incurs a fixed cost of $5,000, which involves catalog design cost and printing setup cost. The variable production cost is $5 per catalog. Annual demand for catalogs is estimated to be normally distributed with a mean of 16,000 and standard deviation of 4,000. Data indicates that, on average, each customer ordering a catalog generates a profit of $35

Suppose that the deal with the recycling company is over, but JE signs an agreement with the printing company so that, if they run out of catalogs, they can do just-in-time printing and delivery at a cost of $15 per catalog. What is the optimal ordering quantity?

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