Pony express creations inc. is a manufacturer of party hats, primarily for the halloween season. oneof their popular products is the elvis wig, complete with sideburns and metallic glasses. the elvis wigis produced in china, so pony express must make a single order well in advance of the upcomingseason. ryan, the owner of pony express, estimates demand for this particular product during thisyear’s selling season as follows: with probability of 0.50, demand will be no more than 20,000 unitswith probability of 0.75, demand will be no more than 35,000 unitswith probability of 0.95, demand will be no more than 45,000 units. the elvis wig retails for $25 each and its wholesale price is $12 each. any leftover can be sold todiscounters at $2.50 each. given the information above, carry out a marginal analysis for ryan if he decides to order 20,000units, or 35,000 units, or 45,000 units. based on your calculation, which of these three order sizeswould bring him the highest expected profit?
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