For a new bond movie which is going to be released soon


For a new Bond movie which is going to be released soon (i.e., is there ever a time that a new Bond movie is not about to be released), a producer of stylish watches has received the exclusive rights to sell a Bond-branded watch. The sales price, as negotiated in the contract, is $350, and a watch costs the producer $150 to assemble and ship to the stores. Their contract stipulates that 6 months after the Blu-Ray release of the movie, the watches have to be destroyed (since a new Bond movie is then already on the horizon), and are thus worthless. Assume that the producer is facing a one-shot production cycle and that it is impossible to produce additional watches later on. The demand for these watches is normally distributed with a mean of 15,000 and a standard deviation of 2,500. Determine the optimal number of watches to produce.

A. 14,550

B. 15,000

C. 15,450

D. 17,500

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Operation Management: For a new bond movie which is going to be released soon
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