Question: For a given perishable product, a retailer pays $5 for each unit, then sells them for $10 each. At the end of the day, units

For a given perishable product, a retailer pays $5 for each unit, then sells them for $10 each. At the end of the day, units not sold at the store are disposed of, and the retailer receives just $1 for each. Given the following probability describing daily demand, how many units should be stocked?

Prob. Prob. (Demand = x) 0.01 0.02 0.04 0.07 0.09 0.12 0.15 (Demand = x) 0.18 0.14 0.09 0.05 0.02 0.01 0.01 x 8 10 12 13

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