Demand, d 60 70 80 90 100

Probability 3% 6% 13% 18% 20%

Price 5
Cost 3
Salvage Value 2.5
110 120 130 140
15% 16% 6% 3%
 Demand, d 60 70 80 90 100
Probability 3% 6% 13% 18% 20%
F(d) 3% 9% 22% 40% 60%

Price 5
Cost 3
Salvage Value 2.5
110 120 130 140
15% 16% 6% 3%
75% 91% 97% 100%
 Demand, d 60 70 80 90 100
Probability 3% 6% 13% 18% 20%
F(d) 3% 9% 22% 40% 60%

Price 5
Cost 3 Cu 2
Salvage Value 2.5 Co 2.5
Critical Ratio 0.8
110 120 130 140
15% 16% 6% 3%
75% 91% 97% 100%
 Demand, d 60 70 80 90 100
Probability 3% 6% 13% 18% 20%
F(d) 3% 9% 22% 40% 60%

Price 5
Cost 3 Cu 2
Salvage Value 2.5 Co 0.5
Critical Ratio 0.8

Demand, Probabilit Sale Over

d y Stock
Ordered Quantity 120
60.00 0.03 60.00 60.00
70.00 0.06 70.00 50.00
80.00 0.13 80.00 40.00
90.00 0.18 90.00 30.00
100.00 0.20 100.00 20.00
110.00 0.16 110.00 10.00
120.00 0.15 120.00 0.00
130.00 0.06 120.00 0.00
140.00 0.03 120.00 0.00
 110 120 130 140
16% 15% 6% 3%
76% 91% 97% 100%

Probability
25%

20%

15%

Under Expected
Pay off
Stock Value 10%

0.00 90.00 2.70

5%
0.00 115.00 6.90
0.00 140.00 18.20
0%
0.00 165.00 29.70 60 70 80 90 100 110 120 130 140
0.00 190.00 38.00
0.00 215.00 34.40
0.00 240.00 36.00
10.00 220.00 13.20
20.00 200.00 6.00
185.10 185.10
0 120 130 140