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The Supermarket Store is about to place an order for Halloween candy. One best-selling brand of candy can be purchased at $ 2.50 per box before and up to Halloween. After Halloween, all the remaining candy can be marked down and sold for $1.00 per box. Assume that the loss in goodwill "cost" stemming from customers whose demand is not satisfied is $ 0.35. The store is considering a price per box of $ 4, $ 4.50, $ 5, and $ 5.50. Recognizing that demand is price dependent, through market research the store determines that demand distribution for these prices is as follows. Demand Distribution when Sales Price = $ 4.00 Demand (boxes) 80 90 100 110 120 130 140 150 Demand (boxes) 65 75 85 95 105 Probability 0.05 Demand Distribution when Sales Price = $ 5.00 115 125 135 0.1 0.15 0.2 0.2 0.15 0.1 0.05 Probability 0.05 0.1 0.15 0.2 0.2 0.15 0.1 0.05 Demand Distribution when Sales Price = $4.50 Demand (boxes) 70 80 90 100 110 120 130 140 Demand (boxes) 50 60 70 Probability 0.05 0.1 0.15 0.2 0.2 Demand Distribution when Sales Price $5.50 80 90 100 110 120 0.15 0.1 0.05 Probability 0.05 0.1 0.15 0.20 0.15 0.20 0.1 0.05 The Supermarket Store is about to place an order for Halloween candy. One best-selling brand of candy can be purchased at $ 2.50 per box before and up to Halloween. After Halloween, all the remaining candy can be marked down and sold for $1.00 per box. Assume that the loss in goodwill "cost" stemming from customers whose demand is not satisfied is $ 0.35. The store is considering a price per box of $ 4, $ 4.50, $ 5, and $ 5.50. Recognizing that demand is price dependent, through market research the store determines that demand distribution for these prices is as follows. Demand Distribution when Sales Price = $ 4.00 Demand (boxes) 80 90 100 110 120 130 140 150 Demand (boxes) 65 75 85 95 105 Probability 0.05 Demand Distribution when Sales Price = $ 5.00 115 125 135 0.1 0.15 0.2 0.2 0.15 0.1 0.05 Probability 0.05 0.1 0.15 0.2 0.2 0.15 0.1 0.05 Demand Distribution when Sales Price = $4.50 Demand (boxes) 70 80 90 100 110 120 130 140 Demand (boxes) 50 60 70 Probability 0.05 0.1 0.15 0.2 0.2 Demand Distribution when Sales Price $5.50 80 90 100 110 120 0.15 0.1 0.05 Probability 0.05 0.1 0.15 0.20 0.15 0.20 0.1 0.05
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Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
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