GAC Company Case Study

| April 22, 2014

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The GAC company is considering the purchase of a special shipment of portable air conditioners manufacted in japan. each unit will cost 80 and it will be sold for 125. GAC does not want to carry surplus air conditioners over until the following year. Thus, all surplus air conditioners will be sold to a wholesaler for 50 per unit. Assume that the air conditioner demanded follows a normal probability distribution with u = 20 sigma = 8
A. What is the recommended order quantity?
B. What is the probilty that GAC will sell all units it orders?
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