A Retailer Is Deciding How Many Units of a Certain

question 41

Multiple Choice

A retailer is deciding how many units of a certain product to stock. The historical probability distribution of sales for this product is 0 units, 0.2; 1 unit, 0.3; 2 units, 0.4, and 3 units, 0.1. The product costs $8 per unit and sells for $33 per unit. What is the largest conditional value (profit) in the entire payoff table for this scenario?

• A) $-24 profit
• B) $42 profit
• C) $9 profit
• D) $51 profit
• E) $75 profit