A Retailer Is Deciding How Many Units of a Certain

question 68

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 $25 per unit.What is the largest conditional value (profit) in the entire payoff table for this scenario?

• A)$-24 profit
• B)$-8 profit
• C)$17 profit
• D)$51 profit
• E)$75 profit

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Definitions:

Habitual Products

Consumer goods that are regularly purchased out of habit, with minimal decision-making process involved.

Psychological Needs

Pertain to the personal gratification consumers associate with a product or service.

Functional Needs

Pertain to the performance of a product or service.

Esteem Needs

Needs that enable people to fulfill inner desires.