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2. A movie studio sells the latest movie on DVD to VideosRUs at $10 per DVD. The marginal production cost for the movie studio is $1 per DVD. VideosRUs prices each DVD at $19.99 to its customers. DVDs are kept on the regular rack for a one-month period, after which they are discounted down to $4.99. VideosRUs places a single order for DVDs. Its current forecast is that sales will be normally distributed, with a mean of 10,000 and a standard deviation of 5,000. a. How many DVDs should Videos Rus order? What is its expected profit? How many DVDs does it expect to sell at a discount? b. What is the profit that the studio makes given VideosRUs actions? 464 Chapter 15 Sourcing Decisions in a Supply Chain c. What is the expected quantity sold by the retailer? d. What is the expected overstock at the retailer? e. What is the expected profit for the retailer? f. What is the expected profit for Benetton

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