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Verse Inc. sells virtual reality ( VR ) goggles, particularly targeting customers who like to play video games. Verse procures each pair of goggles for

Verse Inc. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Verse procures each pair of goggles for $150 from its supplier and sells each pair for $300. Monthly demand for the VR goggles is normally distributed with a mean of 160 units and a standard deviation of 40 units. At the beginning of each month, Verse orders enough goggles to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Verse pays $20 per goggles that remain in inventory. If the monthly demand exceeds 140, Verse sells only the 140 pairs in stock. There is shortage cost of $40 for each unit of demand that is unsatisfied to represent a "loss-of-goodwill" among its customers.

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