What is the expected profit using the order quantity recommended by the supplier (60 globes) and your finding (50 globes?)

You have a business that sells personalised snow globes. Your best seller, is a heart-shaped globe with the lovebirds picture in it.

you print the images right before shipping, but you must order all globes from you supplier in October, to have them ready in January. You offers the keychain in your shop from January 15 to February 14. (For valentines day gifts). After this, no one is interested (so no salvage value).

The demand is normally distributed, with a mean of 33 globes, and a standard deviation of 20 gloves. Each globe cost you 5$, and you sell them for 25$ each.

I have already found the following when I wanted to order 35 globes for this year (I believe this is correct)

Critical Ratio (CR) =	0,8
k value =	0,84162123
G(k)=	0,11163767
G(k) x std.dv = expected units short	2,233

Cs =	20
Ce =	5
Mean	33
Std.dv.	20

But now, you and your supplier want to up the Quantity. The supplier suggest to order 60 globes. You perform a calculation to find the optimal quantity of globes to maximize profit;

Since the problem statement tells us that the demand is normally distributed with mean =375 and standard deviation =220, we can find Q using Excel

Q = NORM.INV(CR,Mean,Std) Q = 50

What is the expected profit using the order quantity recommended by the supply chain specialist (60 globes) and your finding (50 globes?)