MGT$645$ Homework Assignment $2$

Note: The complete z$-$table is attached at the end. A detailed description for how to use the z$-$

table is also provided. You may also use Excel function NORMSINV$($SL$)$ to find z$.$ You also need

the "Supply Chain Performance Assessment Spreadsheet" on Blackboard for your analysis.

Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each

unit costs $$150$ to manufacture, and the introductory price is to be $$300.$ At this price, the

anticipated demand is normally distributed, with a mean of $100$ and a standard deviation of

Any unsold units at the end of the season are unlikely to be valuable and will be

disposed of in a fire sale for $$50$ each. It costs $$10$ to hold a unit in inventory for the entire

season. How many units should Green Thumb manufacture for sale? What is the expected

profit from this policy? On average, how many customers does Green Thumb expect to turn

away because of stocking out?