1. (20 pts) A publisher sells books to Barnes & Noble at S16 each. The unit prod
ID: 334685 • Letter: 1
Question
1. (20 pts) A publisher sells books to Barnes & Noble at S16 each. The unit production cost for the publisher is $4 per book. Barnes & Noble prices the book to its customers at S30 and expects demand over the next two months to be normally distributed, with a mean of 16,000 and a standard deviation of 5,000. Barnes & Noble places a single order with the publisher for delivery at the beginning of the two-month period. Currently, Barnes & Noble discounts any unsold books at the end of two months down to S5, and any books that did not sell at full price sell at this price. a) How many books should Barnes & Noble order? What is its expected profit? How many books does it b) What is the profit that the publisher makes given Barnes & Noble's actions above? Use the following information to solve parts c) and d). expect to sell at a discount? that does not sell A plan under discussion is for the publisher to refund Barne during the two-month period. Because Barnes & Noble shares the point-of-sales data with the publisher, the publisher does not require Barnes & Noble to return all unsold books for verification purpose. As before, Barnes & Noble will discount them to $5 and sell any that remain. c) Under this plan, how many books will Barnes & Noble order? What is the expected profit for Barnes & Noble? How many books are expected to be unsold during the two-month period? [Hint: Since Barnes & Noble gets a refund of $4 from the publisher for each unsold book as well as a S5 of clearing each unsold book after the two-month period, Co-c- b - Sr. Moreover, SM-0] d) What is the expected profit for the publisher under the plan and given Barnes & Noble's actions in part c)?Explanation / Answer
Solution-
I have solved the above question step by step in microsoft excel. I have uploaded the excel file in the google drive and you can download the same from the below link-
https://drive.google.com/file/d/1T7s2kwDjjg9MQpS8dDEiEE9AYq1S8igm/view?usp=sharing
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