Assignment:
The J&B Card Shop sells calendars depicting a different Colonial scene each month. The once-a-year order for each year's calendar arrives in September. From past experience, the September to July demand for the calendars can be approximated by a normal probability distribution with r=500 and o=120. The calendars cost $1.50 each, and J&B sells them for $3 each.
a. If J&B throws out all unsold calendars at the end of July (i.e., salvage value is zero), how many calendars should be ordered?
b. If J&B reduces the calendar price to $1 at the end of July and can sell all surplus calendars at this price, how many calendars should be ordered?
Provide complete and step by step solution for the question and show calculations and use formulas.