If a Vendor Has Correctly Used Marginal Analysis to Select

question 9

Multiple Choice

If a vendor has correctly used marginal analysis to select their stock levels for the day (as in the newsperson problem) , and the profit resulting from the last unit being sold (C_u) is $120 and the loss resulting from that unit if it is not sold (C_o) is $360, which of the following is the probability of the last unit being sold?

• A) Greater than 0.90
• B) Greater than 0.85
• C) Greater than 0.75
• D) Greater than 0.25
• E) None of these

---

Definitions:

Labor and Material

Refers to the total cost of the work force (labor) and the materials used in the production of goods or the provision of services.

Transportation Costs

Expenses incurred in moving goods or materials from one location to another, including shipping fees, freight, and logistics services.

Sales Tax

A tax imposed by a government on the sale of goods and services, usually calculated as a percentage of the retail price.