Scenario C.3 Consider an Item with the Following Discrete Demand Distribution for Distribution

question 6

Multiple Choice

Scenario C.3
Consider an item with the following discrete demand distribution for a one-period inventory decision.

This item experiences a seasonal demand pattern. A profit of $15 per unit is made if the item is sold in season, but a loss of $10 per unit is incurred if the item is sold after the season is over.
-Use the information in Scenario C.3. What is the payoff when 40 units are ordered but a demand of 30 materializes?

• A) $0
• B) $100
• C) $350
• D) $450

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