Question: Trips Logistics, a third - party logistics firm that provides warehousing and other logistics services, is facing a decision regarding the amount of space to

Trips Logistics, a third-party logistics firm that provides warehousing and other logistics services, is facing a decision regarding the amount of space to lease for the upcoming three-year period. 1,000 square feet of warehouse space is required for every 1,000 units of demand, and the current demand at Trips Logistics is for 100,000 units per year. The manager forecasts that from one year to the next, demand may go up 25 percent with a probability of 0.5 or go down by 25 percent by a probability of 0.5. The probabilities of the two outcomes are independent.
 Trips Logistics, a third-party logistics firm that provides warehousing and other

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