Answered: Brit wants to sell throw blankets for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

Brit wants to sell throw blankets for the holiday season at a local flea market. Brit purchases the throws for $40, and sells them to his customers for $55. Assume there is no leftover value for unsold units. The payoff, if he orders 100 and demand is 99, is ______.

Expert Solution

Step 1: Introduce the question:

$L e t space m e space s t a t e space t h e space g i v e n space d a t a comma space T h e space p u r c h a s e space p r i c e space p e r space u n i t space i s space 40 T h e space s e l l i n g space p r i c e space p e r space u n i t space i s space 55 T h e space o r d e r space q u a n t i t y space i s space 100 space u n i t s space T h e space d e m a n d space i s space 99 space u n i t s comma space$

Here, I will determine the Payoff,