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The demand for a seasonal retail product is estimated to be uniformly distributed between 100 and 300 units. The procurement cost is $10 per unit
The demand for a seasonal retail product is estimated to be uniformly distributed between 100 and 300 units. The procurement cost is $10 per unit and the sales revenue is $50 per unit. Units unsold at the end of the season have no value and are to be charged an inventory holding cost of $5 per unit. If a shortage occurs, there is a shortage penalty of $20 per unit, in addition to the lost profit. What should be the optimal stock level at the start of the season
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