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QUESTION 6 The monthly forecast of demand for a product is provided below (i.e., a density and distribution function): f(x) 0 0.0025 F(x) 0.0025
QUESTION 6 The monthly forecast of demand for a product is provided below (i.e., a density and distribution function): f(x) 0 0.0025 F(x) 0.0025 1 0.0149 0.0174 2 0.0446 0.0620 3 0.0892 0.1512 4 0.1339 0.2851 5 0.1606 0.4457 6 0.1606 0.6063 7 0.1377 0.7440 8 0.1033 0.8472 9 0.0688 0.9161 10 0.0413 0.9574 11 0.0225 0.9799 12 0.0113 0.9912 13 0.0052 0.9964 14 0.0022 0.9986 15 0.0009 0.9995 16 0.0003 0.9998 17 0.0001 0.9999 18 0.0000 1.0000 If a company purchases a product in advance and doesn't actually need it, then the company will store it until it can be sold. The expected extra storage cost is $750 per product. For example, if their needs are for 2 products but they advanced purchased 3, then they incur a $750 charge for the 1 container that requires storage. Product purchased on the spot market (after they learn their needs) are expected to cost $4000 per product. For example, the company may advance purchase 1 product but discover that they need 3, in which case the company would purchase an additional 2 products at $4000 each. How many products should the company advance purchase to minimize their costs? (report your answer as an integer)
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