Question: question (1) has been answered, please answer question (2) Find a pay-back contract such that both the manufacturer and distributor enjoy a higher profit than

question (1) has been answered, please answer

question (1) has been answered, please answer question (2) Find a pay-back contract such that both the manufacturer and distributor enjoy a higher profit than (1), and calculate their expected profits. thanks

1. Consider the following demand scenario: Quantity 2100 2200 Probability 10% 16% 30% 17% 2300 2400 2500 12% 2600 15% Suppose the manufacturer produces at a cost of $20/unit, and sells to the distributor at $40/unit. The distributor sells to end customers for $50/unit during season. The unsold units are sold for $4/unit after season. The timing of events is as follows: The manufacturer produces a certain amount. The distributor observes demand. The distributor orders from the manufacturer. Questions: (1) What is the expected profit for the manufacturer and distributor? (2) Find a pay-back contract such that both the manufacturer and distributor enjoy a higher profit than (1), and calculate their expected profits

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