Make the best inventory level decision for the coming season

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Reference no: EM131750484

A firm aims to make the best inventory level decision for the coming season. The demand takes one of two possible values: high or low.

Demand is high, 50, with the probability 50%, and is low, 30, with the probability 50%.

The other parameters are as follows: Retail price is $10, the unit order cost is $5, and the salvage value of each unsold unit is $2.

What is the best order size?

Reference no: EM131750484

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