Question: Evening Shade Novelty Store is planning its sales orders for next year. Every year Evening Shade purchases a novelty lamp in the shape of that
Evening Shade Novelty Store is planning its sales orders for next year. Every year Evening Shade purchases a novelty lamp in the shape of that years date. Evening Shade purchases the lamps for $30 each and sells them for $50. Any lamps leftover at the end of the year are sold at loss, with a salvage value of $20 per lamp. The probability distribution based on historical data of the number of such lamps sold in previous years is shown in table below.
| Probability | ||
| 0.1 | 0.4 | 0.5 |
| Demand | ||
| 10 | 20 | 30 |
How many units should be ordered and available to sell in order to maximize expected profit? Blank 1
What would be the maximum expected profit? Blank 2
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