Concept explainers
Goop Inc. needs to order a raw material to make a special polymer. The demand for the polymer is
- a. How many gallons should Goop purchase to maximize its expected profit? [LO13-1]
- b. Suppose Goop purchases 150 gallons of raw material. What is the probability that it will run out of raw material? [LO13-2]
- c. Suppose Goop purchases 300 gallons of raw material. What are the expected sales (in gallons)? [LO13-2]
- d. Suppose Goop purchases 400 gallons of raw material. How much should it expect to spend on disposal costs (in dollars)? [LO13-2]
- e. Suppose Goop wants to ensure that there is a 92 percent probability that it will be able to satisfy its customers’ entire demand. How many gallons of the raw material should it purchase? [LO13-3]
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