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HI Sir
Sales per week
Sales (units) Probability
10 0.3
20 0.5
30 0.2
Selling price: $20 p.u.
Cost: $10 p.u.
Any unsold units must be sold as scrap for $1 p.u.
The company can contract to purchase 10, 20 or 30 units each weekhow do u get (80) when demand is 10 and size is 30
The profit on the 10 sold is 10 x (20-10) = 100
The loss on the 20 that are not sold is 20 x (1 – 10) = 180
So a net loss of 80.
(I go through this in the lecture – there is no point in using the lecture notes without watching the lectures. It is in the lectures that we work through the examples, and explain and expand on the notes)
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