NoNo is a producer of high-end YoYo's (they only make one product) at unit production cost $10. The YoYos only sell during the summer, and a new model is launched every year. The total production lead time is 6 months.
1. The YoYo is currently sold in 100 different identical retailers. They pay a unit wholesale price of $15 and sell at a unit revenue of $30. Unit salvage value is $8. Each retailer faces a normal distribution of demand with mean of 100 and standard deviation of 40.
A. How many YoYos should each retailer order (Show your work)
B. What is the expected profit for each retailer (Show your work)
C. What is the manufacterer profit?