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Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. All manufacturing and packaging for the holiday season are completed before

Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. All manufacturing and packaging for the holiday season are completed before the start of the season. The demand forecast is given in the table below. Each box costs $10 and is sold for $20. Any unsold boxes at the end of the season are discounted to $8, and they all sell out at this price. The cost of holding a box in inventory for the entire season before selling it at a discount is $1. Find the optimal level of product availability. This level should be in order of 1000.

Probability pi Demand Di
0.05 1,000
0.04 2,000
0.05 3,000
0.08 4,000
0.09 5,000
0.11 6,000
0.16 7,000
0.2 8,000
0.11 9,000
0.11 1,0000

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