The questions in this problem are variations on Example 12.4. The best way to answer them is to build a spreadsheet model that calculates the revenue for the different policies under different parameter values. Each subproblem starts with the values as in the example—that is, the subproblems are independent, not cumulative.

a. Consider the markdown problem in Example 12.4. What is the optimal policy if everything else is the same as in the example, but the salvage value is $0 per television?

b. What is the optimal policy if the starting inventory is 120 instead of 95?

c. What is the optimal policy if the seller wants to have at least 10 television sets remaining at the end of the third week to provide sufficient inventory for his outlet store?

d. What is the optimal policy and corresponding revenue if each markdown generates additional demand of 5 television sets on top of the standard demand?

Assume that the additional demand occurs once, in the period when the markdown occurs. That is, if the seller adopts the policy ($500, $450, $450), he will generate an additional 5 units of demand in week 2; if he adopts the policy

($500, $450, $350), he will generate an additional 5 units of demand in week 2 and in week 3.