In a single period inventory model, we need to decide between stocking 5 units versus 6 units. The probability of demand being 5 or less is 0.6. The cost of each unit is 29 dollars, selling price is 66 dollars, and salvage price is 10 dollars. What is the expected value of the benefit of ordering that extra unit after 5? (Provide one decimal place)
In a single period inventory model, we need to decide between stocking 5 units versus 6 units. The probability of demand being 5 or less is 0.6. The cost of each unit is 29 dollars, selling price is 66 dollars, and salvage price is 10 dollars. What is the expected value of the benefit of ordering that extra unit after 5? (Provide one decimal place)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 1MC: Sienna Company uses the FIFO cost flow assumption. Sierra has inventory with a selling price of 100,...
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In a single period inventory model, we need to decide between stocking 5 units versus 6 units. The probability of demand being 5 or less is 0.6. The cost of each unit is 29 dollars, selling price is 66 dollars, and salvage price is 10 dollars. What is the expected value of the benefit of ordering that extra unit after 5?
(Provide one decimal place)
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