Question: Problem 3 . A purchasing manager is determining the quantity of items to purchase of a product family for the upcoming summer season. There are
Problem A purchasing manager is determining the quantity of items to purchase of a product 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 goes into expedited production by the supplier and the item costs increase by $just for the extra units acquired in a rush and placed in backorder with the customer The maximum that can be produced in an expedited manner is K units. Overstock above the demand is sold on secondary channels for about $$ loss Prepare a payoff matrix and provide the conservative and minmax regret decisions.
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