where P$($Demand $<=$ Q$*)$ is the probability that demand is less than or equal to the recommended order quantity, Q$*.$ The term cu is the cost per unit of underestimating demand $($and losing sales because of going out of stock$)$ and co is the cost per unit of overestimating demand $($having unsold inventory$).$ So$,$

cu $=$ $$24-$ $$16=$ $$8$ lost per unit if Weather Teddy runs out of stock and

cu $=$ $$16-$ $$5=$ $$11$ lost per unit if left$-$over inventory must be sold at the clearance price.