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A high-end fashion goods store has to decide on the order quantity of the products to serve 2 independent demand regions before the selling season.
A high-end fashion goods store has to decide on the order quantity of the products to serve 2 independent demand regions before the selling season. The unit cost of the product is $20 and the product sells for $80. All products remaining unsold at the end of season are purchased by a discounter for $1.05 each. Suppose the demand of each demand region (every day) follows exactly the same demand distribution as below: How many products should be purchased to maximize the expected (total) profit? Demand 0 20 40 60 80 Probability 0.2 0.2 0.2 0.2 0.2 a. 60 b. 80 c. 100 d. 120 e. 140
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