Question: Problem 3 . A purchasing manager is determining the quantity of items to purchase of aproduct family for the upcoming summer season. There are 4
Problem A purchasing manager is determining the quantity of items to purchase of aproduct family for the upcoming summer season. There are demand scenarios: kkk or k units. The options are to purchase at the same levels of demand.Each item costs $ and sells for $ Demand unsatisfied by the initial stock goesinto expedited production by the supplier and the item costs increase by $just forthe extra units acquired in a rush and placed in backorder with the customer Themaximum that can be produced in an expedited manner is K units. Overstock abovethe demand is sold on secondary channels for about $$ loss Prepare a payoffmatrix and provide the conservative and minmax regredecision.
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