Scenario C.3
Consider an item with the following discrete demand distribution for a one-period inventory decision.

This item experiences a seasonal demand pattern. A profit of $15 per unit is made if the item is sold in season, but a loss of $10 per unit is incurred if the item is sold after the season is over.
-Use the information in Scenario C.3. What is the payoff when 40 units are ordered but a demand of 30 materializes?
A) $0
B) $100
C) $350
D) $450

Question

Scenario C.3
Consider an item with the following discrete demand distribution for a one-period inventory decision.
  
This item experiences a seasonal demand pattern. A profit of $15 per unit is made if the item is sold in season, but a loss of $10 per unit is incurred if the item is sold after the season is over.
-Use the information in Scenario C.3. What is the payoff when 40 units are ordered but a demand of 30 materializes?
A) $0 
B) $100 
C) $350 
D) $450

Quizplus · Accepted Answer

The payoff is calculated by considering the revenue from selling 30 units at the demand price and the cost of ordering 40 units. Assuming the cost and selling price are such that the payoff is $350, this would be the correct choice.

Scenario C.3 Consider an Item with the Following Discrete Demand Distribution for Distribution