Christa, a Merchant Wants to Stock Christmas Trees

question 39

Essay

Christa, a merchant wants to stock Christmas trees. She can place only one order per season, so she pays $30 for each tree that she buys and sells them for $80 each. She will incur an additional cost of $6 each for unsold trees that must be hauled to the landfill. If the demand for Christmas trees is normally distributed with a mean of 365 trees and a standard deviation of 46 trees, how many trees should she order?

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Definitions:

Price-prestige

The phenomenon where consumers perceive higher-priced goods to be of superior quality, leading to a positive correlation between price and the amount of prestige or status believed to be conferred by a good.

Promotional Mix

The combination of marketing tools used by a business to execute its promotional strategy, including advertising, sales promotion, public relations, and direct marketing.

Personal Selling

A direct marketing approach involving face-to-face sales presentations to potential buyers to persuade them to make a purchase.

Nonpersonal Selling

Marketing activities that do not involve face-to-face interactions, including advertising, social media marketing, and email marketing.