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 3. A purchasing manager is determining the quantity of items to purchase of aproduct family for the upcoming summer season. There are 4 demand scenarios: 100k,150k,200k, or 250k units. The options are to purchase at the same 4 levels of demand.Each item costs $180 and sells for $300. Demand unsatisfied by the initial stock goesinto expedited production by the supplier and the item costs increase by $100(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 75K units. Overstock abovethe demand is sold on secondary channels for about $150($30 loss). Prepare a payoffmatrix and provide the conservative and min-max regredecision.

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