In August 2003, a car dealer is trying to determine howmany 2004 models should be ordered. Each car costs thedealer $10,000. The demand for the dealer’s 2004 modelshas the probability distribution shown in Table 4. Each caris sold for $15,000. If the demand for 2004 cars exceeds thenumber of cars ordered in August, the dealer must reorderat a cost of $12,000 per car. If the demand for 2004 cars falls short, the dealer may dispose of excess cars in an end-of-model-year sale for $9,000 per car. How many 2004 models should be ordered in August? No. of CarsDemanded Probability20 .3025 .1530 .1535 .2040 .20
In August 2003, a car dealer is trying to determine howmany 2004 models should be ordered. Each car costs thedealer $10,000. The demand for the dealer’s 2004 modelshas the probability distribution shown in Table 4. Each caris sold for $15,000. If the demand for 2004 cars exceeds thenumber of cars ordered in August, the dealer must reorderat a cost of $12,000 per car. If the demand for 2004 cars falls short, the dealer may dispose of excess cars in an end-of-model-year sale for $9,000 per car. How many 2004 models should be ordered in August? No. of CarsDemanded Probability20 .3025 .1530 .1535 .2040 .20
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
In August 2003, a car dealer is trying to determine how
many 2004 models should be ordered. Each car costs the
dealer $10,000. The demand for the dealer’s 2004 models
has the probability distribution shown in Table 4. Each car
is sold for $15,000. If the demand for 2004 cars exceeds the
number of cars ordered in August, the dealer must reorder
at a cost of $12,000 per car. If the demand for 2004 cars
falls short, the dealer may dispose of excess cars in an end-
of-model-year sale for $9,000 per car. How many 2004
models should be ordered in August?
No. of Cars
Demanded Probability
20 .30
25 .15
30 .15
35 .20
40 .20
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