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Suppose a retailer has two markets, 1 and 2. Demand 1 follows a NORMAL distribution with mean 98 and standard deviation 10. The retail price
Suppose a retailer has two markets, 1 and 2. Demand 1 follows a NORMAL distribution with mean 98 and standard deviation 10. The retail price of each sold unit is $30, the order cost of each unit is $12, and in case there is an unsold unit in inventory, the firm can still obtain a salvage value $6 for each unsold unit. Assume that there is no penalty cost for any unmet demand. Demand 2 also follows a NORMAL distribution with mean 120 and standard deviation 20. The retail price of each sold unit is $28, the order cost of each unit is $10, and the salvage value of any unsold unit is $5. Also there is no penalty cost for any unmet demand. 1. Use Inventory Management (Q*) to decide the best order size decisions for the two markets
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