Question: Solve the following using decision trees for supply chain management: Walmart, a retail giant, needs to decide on the optimal inventory level for the upcoming
Solve the following using decision trees for supply chain management:
Walmart, a retail giant, needs to decide on the optimal inventory level for the upcoming season. Based on historical data and market analysis, there is a chance that demand will be Billion USD and a chance that demand will be Billion USD worth of goods and services. The ordering cost per unit is $ and the retail price per unit is $ For each unit of surplus inventory, Walmart can sell it for $ However, for each unit of unmet demand, there is a penalty cost of $ Walmart can choose between ordering Billion USD or Billion USD worth of goods and services. Which ordering strategy should Walmart choose to maximize its profit?
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