Question: Question 2: Kolette will be selling a new, small purse for $399 in the upcoming spring season and needs to determine how many to make.

Question 2: Kolette will be selling a new, small

Question 2: Kolette will be selling a new, small purse for $399 in the upcoming spring season and needs to determine how many to make. They will not produce more once the season starts. The firm makes the purse for $200. If sold on mark-down, the purse will be sold for $175. Based on previous new product offers, demand for the purse during the season is expected to be Normally distributed with a mean of 500 and a coefficient of variation is 0.4. a) [2pts] What is the maximum profit Kolette can expect from the bag, i.e., if there was no uncertainty? b) [4 pts] How many units of the bag should Kolette produce for sale? c) [4 pts] What is the mismatch cost because of uncertainty? d) [2 pts] Suppose the demand is Uniformly Distributed between 0 and 1000. That is, any posible number between 0 and 1000 is equally likely. How many units of the purse should Kolette produce for sale? e) [4 pts] Suppose that on markdown the purse sells for $225 and demand is Uniformly Distributed between 0 and 1000. How many units should Kolette produce for sale and what would the expected profit be? Internal f) [4 pts] Suppose the purse sells for $225 and demand is Normally distributed with a mean of 500 and a coefficient of variation of 0.4. How many units should Kolette produce for sale according to the Newsvendor model? How would you determine the number of units to produce in the real world

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