A distributor is negotiating a supply contract for one of its item. The end-customer demand...
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A distributor is negotiating a supply contract for one of its item. The end-customer demand is forecasted as follows: Quantity Probability 20,000 0.2 30,000 0.4 45,000 0.35 60,000 0.05 The current parameters are as follows: $100/unit Price charged by distributor to end-customer Price charged by supplier to distributor Salvage value Fixed manufacturing cost Variable manufacturing cost $70/unit $30/unit 0 $45/unit Assume Q = 60,000 and the expected number of sold items is 38,000. What is the profit for the supplier
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