Sales Budget

Ricky attempts to balance its concerns about stockouts of inventory with concerns about excess inventory for the year. Ricky has developed the probabilities below for sales for the coming year. What amount should Ricky budget for sales for the coming year?

Sales Level	Probability
$100,000	20%
$200,000	30%
$300,000	30%
$400,000	15%
$500,000	5%

Answer:

Sales Level	Probability	Probability-weighted amount
Total Sales