How do I do questoin 14? Determining the Optimal Level of Product Availabilitydeviation of 8,000. Each box costs $10 and is sold for $20.distributed, with a mean of 20,000 and a standard deviationAny unsold boxes at the end of the season are discounted to$8, and they all sell out at this price. The cost of holding abox in inventory for the entire season before selling it at adiscount is $1.of 8,000. Each ornament costs $30 and is sold for $95. Allunsold ornaments are destroyed at the end of the season, toensure the value of the limited edition.a. How many boxes of each design should LGC manufacture?b. What is the expected profit from this policy?c. How many boxes does LGC expect to sell at a discount?d. An option being considered by LGC is to separate choco-late production from packaging. Chocolates will be pro-duced before the start of the season, but packaging will bedone on an express line as orders come in. The expressline and separation of steps adds $2 to the cost of produc-tion. How many boxes of chocolates should LGC manu-facture if it decides to postpone packaging? What is theexpected profit? How many boxes will LGC sell at a dis-count if it uses postponement?e. At what additional cost of postponement (instead of thecurrent $2) would LGC be indifferent between operatingwith and without postponement?13. The Knitting Company (TKC) is planning production for itsfour sweater styles that are popular during Christmas. Allfour styles have demand that is normally distributed. Thebest-selling style has an expected demand of 30,000 and astandard deviation of 5,000. Each of the other three styles hasan expected demand of 10,000 with a standard deviation of4,000. Currently, all sweaters are produced before the start ofthe season. Production cost is $20 per sweater, and they aresold for a wholesale price of $35. Any unsold sweaters at theend of the season are discounted to $15, and they all sell atthat price. It costs $2 to hold the sweater in inventory for thea. How many ornaments should the designer order? What isthe expected profit?b. The manufacturer has offered to discount the price to $28per ornament if at least 25,000 are ordered. How shouldthe designer respond?15. A publisher is printing calendars for the coming year.Demand for calendars is normally distributed, with a mean of70,000 and a standard deviation of 25,000. The cost per cal-endar is $3, and they are sold for $10 cach. All unsold calen-dars are recycled at the end of January.a. How many calendars should the publisher have printed?What is the expected profit?b. The printer has offered to discount the printing cost to$2.75 per calendar if the publisher orders at least 100,000.What should the publisher do?16. An electronics manufacturer has outsourced production of itslatest media players to a contract manufacturer in Asia.Demand for the players has exceeded all expectations,whereas the contract manufacturer has limited productioncapacity. The electronics manufacturer sells three types ofplayers-a 40-GB player, a 20-GB player, and a 6-GB player.For the upcoming holiday season, the demand forecast forthe 40-GB player is normally distributed, with a mean of20,000 and a standard deviation of 7,000, the demand fore-cast for the 20-GB player has a mean of 40,000 and a stan-dard deviation of 11,000, and the demand forecast for the6-GB player has a mean of 80,000 and a standard deviationof 16,000. The 40-GB player has a sale price of $200, a pro-duction cost of $100, and a salvage value of $80. The 20-GBplayer has a sale price of $150, a production cost of $90, anda salvage value of $70. The 6-GB player has a sale price of$100, a production cost of $70, and a salvage value of $50.a. How many units of each type of player should theelectronics manufacturer order if there are no capacityentire season if it does not sell.a. How many sweaters of each type should TKC manufacture?b. What is the expected profit from this policy?c. How many sweaters does TKC expect to sell at a discount?d. TKC is considering the postponement of knitting andusing flexible machines. This will require the base sweat-ers to be made in advance (identical for each of the fourtypes) and the final patterns to be knit later. This willincrease production cost per sweater to $21.40. Howmany sweaters should TKC manufacture with postpone-ment? What is the expected profit from this policy?e. Another option is to produce the popular style withoutpostponement and the other three styles using postpone-ment. What is the expected profit under this policy?14. A designer is planning orders for its annual limited-editionornament. Demand has been forecast to be normallyconstraints?b. The contract manufacturer has available productioncapacity of only 140,000 units. What is the expectedprofit if the electronics manufacturer orders 20,000 unitsof the 40-GB player, 40,000 units of the 20-GB player,and 80,000 units of the 6-GB player?c. How many units of each type of player should the elec-tronics manufacturer order if the available capacity is140,000? What is the expected profit?

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a)
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14. A designer is planning orders for its annual limited-edition ornament. Demand has been forecast to be normally