For a given perishable product, a retailer pays $5 for each unit, then sells them for $10 each. At the end of the day, units not sold at the store are disposed of, and the retailer receives just $1 for each. Given the following probability distribution describing daily demand, how many units should be stocked? x Prob. (Demand = x) x Prob. (Demand = x) 0 0.01 7 0.18 1 0.02 8 0.14 2 0.04 9 0.09 3 0.07 10 0.05 4 0.09 11 0.02 5 0.12 12 0.01
For a given perishable product, a retailer pays $5 for each unit, then sells them for $10 each. At the end of the day, units not sold at the store are disposed of, and the retailer receives just $1 for each. Given the following probability distribution describing daily demand, how many units should be stocked? x Prob. (Demand = x) x Prob. (Demand = x) 0 0.01 7 0.18 1 0.02 8 0.14 2 0.04 9 0.09 3 0.07 10 0.05 4 0.09 11 0.02 5 0.12 12 0.01
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section9.3: Single-stage Decision Problems
Problem 5P
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For a given perishable product, a retailer pays $5 for each unit, then sells them for $10 each. At the end of the day, units not sold at the store are disposed of, and the retailer receives just $1 for each. Given the following probability distribution describing daily demand, how many units should be stocked?
x Prob. (Demand = x) x Prob. (Demand = x)
0 0.01 7 0.18
1 0.02 8 0.14
2 0.04 9 0.09
3 0.07 10 0.05
4 0.09 11 0.02
5 0.12 12 0.01
6 0.15 13 0.01
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