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Decision- best stock level

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Given Buy at $4.00, Sell at $7.00

Demand 0 P d .1

Demand 1 P d .2

Demand 2 p d .2

Demand 3 P d .3

Demand 4, P d .2

a.Select the best stock level.
b. Repeat with salvage value of $1

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Solution Summary

Decides what should be the level in the inventory, given the probability distribution of demand.

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