(Teddy Bower Parkas) Teddy Bower is an outdoor clothing an accessories chain that purchases a line of parkas at $10 each from its Asian supplier, TeddySports. Unfortunately, at the time of order placement, demand is still uncertain.
Teddy Bower forecasts that its demand is normally distributed with mean of 2,100 and standard deviation of 1200. Teddy Bower sells these parkas at $22 each. Unsold parkas have little salvage value; Teddy Bower simply gives them away to a charity.
A) What is the probability this parka turns out to be a “dog,” define as a product that sells less than have of the forecast?
B) How many parkas should Teddy Bower buy from TeddySports to maximize expected profit?