In Problem 12, suppose that the demand for cars is normally distributed with mean 100 and standard deviation 15. Use @RISK to determine the best order quantity, that is, the one with the largest mean...

In Problem 12, suppose that the demand for cars is normally distributed with mean 100 and standard deviation 15. Use @RISK to determine the best order quantity, that is, the one with the largest mean profit. Using the statistics and/or graphs from @RISK, discuss whether this order quantity would be considered best by the car dealer. (The point is that a decision maker can use more than just mean profit in making a decision.)

Problem 12

 In August 2007, a car dealer is trying to determine how many 2008 cars to order. Each car ordered in August 2007 costs $10,000. The demand for the dealer’s 2008 models has the probability distribution shown in the file P11_12.xlsx. Each car sells for $15,000. If demand for 2008 cars exceeds the number of cars ordered in August, the dealer must reorder at a cost of $12,000 per car. Excess cars can be sold at $9000 per car. Use simulation to determine how many cars to order in August. For your optimal order quantity, find a 95% confidence interval for the expected profit