Question
Large Lots is planning a seven-day promotion on a discontinued model of 31 color television sets. At a price of $575 per set, the daily
Large Lots is planning a seven-day promotion on a discontinued model of 31" color television sets. At a price of $575 per set, the daily demand for this type of TV has been estimated as follows:
Units Demanded per Day
0 | 1 | 2 | 3 | 4 | 5 | |
Probability | 0.15 | 0.20 | 0.30 | 0.20 | 0.10 | 0.05 |
Large Lots can order up to 50 of these TVs from a surplus dealer at a cost of $325. This dealer has offered to buy back any unsold sets at the end of the promotion for $250 each. Use 250 replicates and a random number seed of 123.
Continuing with the Large Lots prompt, and run the simulation using the replicates and the random seed in the prompt above then fill in the blanks below.
Large Lots should place an order for ___________televisions. This provides the highest level of expected profit which is $ __________________________________
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started