15.8 Quantity Flexibility
Contract
order O1000
α0.2
β0.2
Q1200
q800
production cost 1$
wholesale price 1$
retail price 10$
μ1,000
σ300
E(total profit) 8,346.63$
Parts b & c Total Profit
α = 0.5, β = 0.2 8,440.52$
α = 0.2, β = 0.5 8,346.63$