How many units of new product should be purchased for resale

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Reference no: EM131181878

You are considering adding a new food product to your store for resale. You are certain that, in a month, minimum demand for the product will be 6 units, while maximum demand will be 8 units. (Unfortunately, the new product has a one-month shelf life and is considered to be waste at the end of the month.) You will pay $60/unit for this new product while you plan to sell the product at a $40/unit profit. The estimated demand for this new product in any given month is 6 units(p=0.1), 7 units(p=0.4), and 8 units(p=0.5). Using EMV analysis, how many units of the new product should be purchased for resale?

Using EMV analysis, how many units of the new product should be purchased for resale?

Reference no: EM131181878

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