Question: PLEASE ANSWER THE QUESTION answer Q 1 & 2 Zamatia Ltd . is an Italian upscale maker of eyewear. UV Inc., short for UmbraVisage, is

PLEASE ANSWER THE QUESTION answer Q 1&2
Zamatia Ltd. is an Italian upscale maker of eyewear. UV Inc., short for UmbraVisage, is one of their retailers in the United States. To match UVs stylishassortment, UV only operates small boutique stores located in trendy locations. Weconsider one particular store located in Miami Beach, Florida. Due to longreplenishment lead time, UV receives only one delivery of Zamatia glasses beforeeach season.Consider Zamatias entry-level sunglasses for the coming season, the Bassano. UVpurchases each one of those pairs of sunglasses from Zamatia for $75 and retailsthem for $115. Zamatias production and shipping costs per pair are $35. At the endof the season, UV generally needs to offer deep discounts to sell remaininginventory; UV estimates that it will only be able to fetch $25 per leftover Bassano atthe Miami Beach store. UVs Miami Beach store believes this seasons demand forthe Bassano can be represented by a normal distribution with a mean of 250 and astandard deviation of 125.
Scenario A: Without Any Contracts In this scenario, the supplier produces the products after it receives the order from the buyer(MTO). The supplier bears no risk. The buyer bears all the risk (too much or too little issue). The buyer makes ordering decision. Sunglass example The retailer UV earns 115-75= $40 for each unit sold, and loses 75-25= $50 for eachunit unsold. The supplier Zamatia earns 75-35= $40 for each unit sold to UV.
QUESTION 1
Given the above information, apply newsvendor model to determine the optimal orderquantity and calculate UVs expected profit.
QUESTION 2
According to the order quantity determined above, calculate the profit of Zamatia.

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