Question: Do you know how to solve? Question Completion Status QUESTION 6 The monthly forecast of demand for a product is provided below (i.e., a density

Do you know how to solve?

Do you know how to solve? Question Completion Status QUESTION 6 The

Question Completion Status QUESTION 6 The monthly forecast of demand for a product is provided below (i.e., a density and distribution function): F( xx) F(x) 0.0025 0.0025 0.0149 0.0174 2 0.0446 0.0620 3 0.0892 0.1512 4 0.1339 0.2851 0.1606 0.4457 0.1606 0.6063 0.1377 0.7440 0.1033 0.8472 0.0688 0.9161 10 0.0413 0.9574 11 0.0225 0.9799 12 0.0113 0.9912 13 0.0052 0.9964 14 0.0022 0.9986 15 0.0009 0.9995 16 0.0003 0.9998 17 0.0001 0.9999 18 0.0000 1.0000 If a company purchases a product in advance and doesn't actually need it, then the company will store it until it can be sold. The expected extra storage cost is $750 per product. For example, if their needs are for 2 products but they advanced purchased 3, then they incur a $750 charge for the 1 container that requires storage. Product purchased on the spot market (after they learn their needs) are expected to cost $4000 per product. For example, the company may advance purchase 1 product but discover that they need 3, in which case the company would purchase an additional 2 products at $4000 each. How many products should the company advance purchase to minimize their costs? (report your answer as an integer)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Mathematics Questions!