Supply Management: How many T-shirts should be produced?
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20. Sally's Silk screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event itself, which lasts one day, Sally can sell T-shirts for $20 apiece. However, when the event ends, any unsold T-shirt are sold for $4 apiece. It costs Sally $8 to make a specialty T-shirt. Using Sally's estimate of demand that follows, how many T-shirt should she produce for the upcoming event?
Demand Probability
300 .05
400 .10
500 .40
600 .30
700 .10
800 .05
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Solution Summary
The solution computes how many T-shirts should be produced with given demand and probability.
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