A product costs 20 and sells for 50 it has a salvage value, Ask an Expert

Management Studies

A product costs $20 and sells for $50. It has a salvage value of 4$ if it does not sell.

a) What is the stock-in and stock-out probability?

b) Assume the demand is uniformly distributed from 0 to 1,000, as in the exercise seen in class.

What is the optimal number of products to buy?

c) Given that you bought a number of products following b), what are the net profits if you observe a demand of 500?

d) Given that you bought a number of products following b), what are the net profits if you observe a demand of 500? What is the stock-out cost?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92034073

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