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Suppose there is 20% chance that demand will be 1, 50% chance that demand will be 2 and 30% chance that demand will be 3.
Suppose there is 20% chance that demand will be 1, 50% chance that demand will be 2 and 30% chance that demand will be 3. Selling price of item is $20. Cost price of item is $5. Items that are unsold at the end of the day are discard (i.e., worthless). The order quantity that maximizes expected daily profits is
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