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 order quantity with the highest expected payoff?
A) 20 units
B) 30 units
C) 40 units
D) 50 units

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 order quantity with the highest expected payoff?
A) 20 units 
B) 30 units 
C) 40 units 
D) 50 units

Quizplus · Accepted Answer

Without the specific details provided in Scenario C.3, it's impossible to calculate or determine the order quantity with the highest expected payoff. However, based on the question's structure, if B (30 units) is the correct answer, it suggests that within the given scenario, ordering 30 units yields the highest expected payoff when considering factors such as demand, cost, and potential revenue. This is a typical decision-making problem in operations management, specifically in inventory management, where the goal is to optimize order quantities to maximize profits or minimize costs.

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