A distributor is negotiating a supply contract for one of its item. The end-customer demand is...

 

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A distributor is negotiating a supply contract for one of its item. The end-customer demand is forecasted as follows: Quantity Probability 20,000 0.2 30,000 0.4 45,000 0.35 60,000 0.05 The distributor and supplier have agreed on a buyback contract as follows: Price charged by distributor to end-customer $100/unit Price charged by supplier to distributor $70/unit Buyback price offered by supplier Salvage value $40/unit $30/unit Fixed manufacturing cost 0 Variable manufacturing cost $45/unit What is the marginal loss (for each unsold) for the distributor under the buy-back contract? A distributor is negotiating a supply contract for one of its item. The end-customer demand is forecasted as follows: Quantity Probability 20,000 0.2 30,000 0.4 45,000 0.35 60,000 0.05 The distributor and supplier have agreed on a buyback contract as follows: Price charged by distributor to end-customer $100/unit Price charged by supplier to distributor $70/unit Buyback price offered by supplier Salvage value $40/unit $30/unit Fixed manufacturing cost 0 Variable manufacturing cost $45/unit What is the marginal loss (for each unsold) for the distributor under the buy-back contract?