Daily demand for a product is described in the table below. Profit per unit sold is $\$ 10.00$. Unmet demand costs are $\$ 5.00$ in goodwill. The demand is not carried forward. Excess stock is liquidated on a daily basis at a cost of $\$ 3.00$ per unit. That is, excess stock is not carried forward in stock. Orders have to be placed using a fixed policy of ordering $X$ number of units each day. Lead-time is 0 , but only one order can be placed each day. What should be the value of $\mathrm{X}$ in order to maximize profit? Try two "good" ordering policies (i.e. two order quantities), simulate the profit corresponding to the two policies for 10 days, and choose the best quantity.

Question

Quizplus · Accepted Answer

The Answer of Daily demand for a product is described in the table below. Profit per unit sold is $\$ 10.00$. Unmet demand costs are $\$ 5.00$ in goodwill. The demand is not carried forward. Excess stock is liquidated on a daily basis at a cost of $\$ 3.00$ per unit. That is, excess stock is not carried forward in stock. Orders have to be placed using a fixed policy of ordering $X$ number of units each day. Lead-time is 0 , but only one order can be placed each day. What should be the value of $\mathrm{X}$ in order to maximize profit? Try two "good" ordering policies (i.e. two order quantities), simulate the profit corresponding to the two policies for 10 days, and choose the best quantity.

Daily Demand for a Product Is Described in the Table $10.00\$ 10.00$10.00

Daily Demand for a Product Is Described in the Table $\$ 10.00$