Consider a manufacturer of a seasonal good based on, Ask an Expert

Management Studies

Consider a manufacturer of a seasonal good. Based on extensive market research, the manufacturer estimates that demand X for the product will be

x={200 with probailitiy 0.2

{600 with probailitiy 0.3

{900 with probailitiy 0.4

{1600 with probailitiy 0.1

Suppose that the unit production cost is $50, the unit selling price is $120. In addition, when we reach the end of the selling season, each unsold item can be sold to discount stores at $20. Based on above information, how many units should the manufacturer produce?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92538015

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