Question: Verse Inc. sells virtual reality ( VR ) goggles, particularly targeting customers who like to play video games. Verse procures each pair of goggles for
Verse Inc. sells virtual reality VR goggles, particularly targeting customers who like to play video games. Verse procures each pair of goggles for $ from its supplier and sells each pair for $ Monthly demand for the VR goggles is normally distributed with a mean of units and a standard deviation of units. At the beginning of each month, Verse orders enough goggles to bring the inventory level up to goggles. If the monthly demand is less than Verse pays $ per goggles that remain in inventory. If the monthly demand exceeds Verse sells only the pairs in stock. There is shortage cost of $ for each unit of demand that is unsatisfied to represent a "lossofgoodwill" among its customers.
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