Doll therapy is one way Alzheimer’s disease caregivers ease anxiety and bring joy to loved ones with dementia. CVS retail stores in the USA plan to introduce this doll into their product portfolio. One of the dolls, which is very famous in this segment, is called ‘TalktoMe.’ CVS stores want to introduce them during the Holiday Season. The supplier offers voice modules for two different languages: Spanish and English. The supplier plans to assemble the specific language voice module at the factory and ship the fully assembled doll, with the language module built-in, to CVS.
Irrespective of the language setting, a doll’s manufacturing cost is $60 (including the voice module), and the wholesale price (i.e., the price at which CVS buys the doll from the supplier) is $100. The retail price (i.e., the price at which CVS sells the doll to the customer) is $250. CVS estimates that any unsold inventory of dolls can be sold-off (salvaged) for a discounted price of “90% off” of the retail price per doll.
After researching potential customer demand, CVS anticipates that the English-speaking dolls will sell more than the Spanish-speaking dolls. CVS estimates that the demand for English-speaking dolls follows a Normal distribution with a mean of 2500 units and a standard deviation of 600. For Spanish-speaking dolls, the demand is normally distributed with a mean of 1200 and a standard deviation of 300. You can assume that the demand for the products is independent of each other. The dolls are made in Mexico, and CVS must place the order well before the Holiday Season.
Question 1
How many units of each doll (English and Spanish) should CVS maximize the expected profit? What is CVS’s expected profit in this case? What is the supplier’s profit in this case?
Question 2
Now the supplier and CVS agree on a revenue-sharing agreement for the doll. Once CVS sells a doll, 14% of the revenue they make (i.e., 14% from the $250 retail price of each doll sold) is shared with the supplier. The supplier, however, only receives 14% of the revenue of dolls sold during the season – it does receive any share of the revenue CVS makes from leftover dolls that are salvaged for a deep discount.
You can assume that the supplier always manufactures on a build-to-order basis. This means that the supplier always produces precisely the order quantity requested by CVS, with no inventory leftover or unfulfilled demand occurring at the supplier’s end.
Under this agreement, the supplier agrees to a reduced wholesale price of $70 per doll. The cost of manufacturing for the supplier remains $60 per doll. The supplier will generate additional profit from its share of the retailer’s revenue.
How many units of each doll (English and Spanish) should CVS now order to maximize the expected profit? Calculate the expected profit for both the supplier and for CVS under this revenue-sharing agreement.
Question 3
Compare the profits for the retailer and the supplier in Questions 1 and 2. What is your explanation for the difference between the profits?

My MasterPapers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Us

Outstanding Academic Writing Service

At, you are assured of professional essay writing help from the leading experts online. Quality comes at the forefront of our custom writing service to ensure that all our customers are satisfied with the work delivered. We value repeat customers. For this reason, we ensure that each task is completed to perfection for high scores.

Top Writers

Our hiring process is highly intensive. The writers are exposed to a strict selection procedure before hiring to ensure that we acquire the most qualified, well-educated and experienced writers. Our team of writers, professors, editors and researchers will ensure that you get incredible results.

Plagiarism-Free Papers

We highly discourage plagiarism. For this reason, we have trained our writers in such a way that all the papers are written from scratch and are free from plagiarism. We also pay attention to ensure that each paper is completed as per the instructions provided. Referencing and citations are done as per the paper format selected by the customer. These include: APA, MLA, Chicago, Harvard, Turabian among others.

24/7 Customer Support

You can contact our support team via the chat window at the bottom right corner. Alternatively, feel free to email us via our support email: Our team is available 24/7 to respond to your queries and guide you though where need be.

Swift Delivery & 100% Money Back Guarantee

Simply choose the desired deadline when placing the order. The task is assigned to the most qualified writer as soon as the order is successfully placed. All the papers are delivered to you within the deadline selected. In case a paper cannot be delivered within the deadline selected, we request for a deadline extension within the shortest time possible.

Free Unlimited Revisions

Our customers can always request for a revision in case they feel that something needs to be added or changed after the final paper has been delivered. We do not charge for revisions. However, we highly discourage our customers from misusing this policy.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services specializes in custom essay writing for all level of students. Simply relax as we get your paper done within the timeline indicated.


Academic Help Service

Our team of skilled writers and researchers is readily available to get any type of academic paper completed. We deliver high quality papers and projects to our customers to ensure that we maintain a long-term relationship that will shine your academic career.


Admission Essays & Professional Writing

An admission essay allows you to express yourself by providing personal details that wouldn’t have fit on other areas of an application. We have a team of experienced writers who will get you to the desired academic level through a professional and a personalized admission essay.


Editing & proofreading

Are you seeking for editing or proofreading help? We have a team of editors who will ensure that any issue within you paper has been addressed. Upload the paper to be cleaned up and relax as we get the job done.


Revision Support

At, you can always ask for revision in case you want some changes in you paper. We focus on ensuring that the grammar, research and formatting are done as per the latest academic writing standards.