Lake Grove Confectionaries (LGC) sells chocolates for the
holiday season in specially designed boxes. The firm sells four
designs, and currently all packaging is done in the plant as
chocolates are manufactured. All manufacturing and packaging for
the holiday season are completed before the start of the season.
The demand forecast for each of the four designs is normally
distributed, with a mean of 20,000 and a standard deviation of
8,000. Each box costs $10 and is sold for $20. Any unsold boxes at
the end of the season are discounted to $8, and they all sell out
at this price. The cost of holding a box in inventory for the
entire season before selling it at a discount is $1.
Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. The firm sells fou
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