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:

Retail Feed Stores

Shops or outlets that specialize in selling feed and other supplies for animals to the general public.

Wholesalers

Businesses that purchase goods in large quantities from manufacturers or distributors and then sell them in smaller quantities to retailers or other businesses.

Wholesaler

A type of business that purchases goods in large quantities from manufacturers or importers and sells them to retailers, other wholesalers, or occasionally to final consumers.

Intermediary

A person or organization that acts as a mediator or agent between parties, especially in a business or financial transaction.