Prepare a managerial report that address the following issues and recommends an order quantity for the Weather Teddy product

Normal Probability Distribution
Below is a distribution graph showing the details of the forecaster’s prediction. The mean of
the distribution is the expected 20,000 units and the standard deviation is 6079 units. “Z”
scores for the 90% probability that units sold will be between 10,000 and 30,000 units are -
1.645 and +1.645, respectively.
At x = 30,000,




= 1.645




Normal distribution 20,000 
Likelihood of Stock-Outs for Specific Order Quantities
As noted in the Specialty Toys Business Model section, the company must balance the
additional profits associated with each toy sold ($8) against the losses that will be incurred for
any toys leftover after the holiday season ($11). Below, we provide the probability that
Specialty Toys will run out of the Weather Teddy based on estimated quantities provided to
us by management.
20,000
.05
5
10,0000 30,000
0
.05 .90
2

@ 15,000




P(stockout) = 0.7939
Analysis: There is an approximately 79.39% chance that Specialty Toys will run out of the
Weather Teddy if the company orders 15,000 units.
@ 18,000




P(stockout) = 0.6293
Analysis: There is an approximately 62.93% chance that Specialty Toys will run out of the
Weather Teddy if the company orders 18,000 units.
@ 24,000




P(stockout) = 0.2546
Analysis: There is an approximately 25.46% chance that Specialty Toys will run out of the
Weather Teddy if the company orders 24,000 units.
@ 28,000




P(stockout) = 0.0934
3

Analysis: There is an approximately 9.34% chance that Specialty Toys will run out of...