Nara is a fashion apparel and accessories chain store that procures a line of new shorts at $10 each from its European supplier. Unfortunately, at the time of order placement, demand is still
unknown. Nara forecasts that its demand is normally distributed with mean of 2100 and a standard deviation of 1200 units. Nara sells these shorts at $22 each. Unsold shorts have little salvage
values and they would be donated to charity. Based on this information:
• How many shorts should Nara buy from its supplier to maximize expected profit? • If Nara wants to ensure a 98.5% in-stock probability, how many shorts should it order?