Quantity Discounts Finished_A

# Quantity Discounts Finished_A - -\$2,000 \$0 \$2,000 \$4,000...

This preview shows page 1. Sign up to view the full content.

Model of expected demands Demand 500 1000 1500 2000 2500 3000 3500 4000 4500 Probability 0.03 0.05 0.15 0.25 0.25 0.15 0.07 0.04 0.02 Sum of probabilities --> 1 Order quantity Expected profit 500 \$3,000 1000 \$6,750 1500 \$9,500 2000 \$12,250 2500 \$11,375 3000 \$9,500 3500 \$4,875 4000 \$1,350 4500 -\$4,150 500 1000 1500 2000 2500 3000 3500 4000 4500 -\$6,000 -\$4,000
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -\$2,000 \$0 \$2,000 \$4,000 \$6,000 \$8,000 \$10,000 \$12,000 \$14,000 Expected Profit versus Order Quantity Order Quanity Expected Profit Order 2000 to maximize the expected profit. A B C D E F G H I J K 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52...
View Full Document

## This note was uploaded on 02/24/2010 for the course ACCT 302 taught by Professor Staff during the Spring '08 term at Old Dominion.

Ask a homework question - tutors are online