Can you show me how to solve this problem? Wholemark is an Internet order busine

Question

Can you show me how to solve this problem?

Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.70 per card, and the cost of printing is $0.40 per card. The company receives $4.60 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 7,100 and standard deviation 550. (Assume these four are independent.)

What is the optimal production quantity for the card? (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round your answer to the nearest whole number.)

  Optimal production quantity

This is all of the information that they give me, I'm not sure how to get you more information?

  Optimal production quantity

This is all of the information that they give me, I'm not sure how to get you more information?

Explanation / Answer

underage cost = p -c

overage cost = c- s

here p = 4.6 , s = 0 ,c = 0.7+0.4 = 1.1

Underage Cost /(Underage Cost + Overage Cost) = (4.6-1.1)/(4.6) = 3.5/4.6 = 0.76086

P(Z< z*) = 0.76086

z* = 0.709

Y = X1 +X2 +X3 +X4

E(Y) = 4*7100 =

sd (Y) = 550* sqrt(4) = 1100

hence Q = 4*7100+ 0.709 * 550*2 = 29179.9

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.