Probability of sales Qty Probabilitry

0.11 8000 0.11 Wholesaler selling price 80 per unit Profit (w) 30
0.11 10000 0.11 Wholesaler buying price 50 per unit profit 45
0.28 12000 0.28 Retailer Selling price 125 per unit loss 20
0.22 14000 0.22 Salvage price 60 per unit
0.18 16000 0.18 (Retailer sells on his own to some other seller)
0.1 18000 0.1

retailer Demand
0.11 0.11 0.28 0.22 0.18 0.1 Net expted profit
Profit 8000 10000 12000 14000 16000 18000 Retailer
8000 360000 360000 360000 360000 360000 360000 360000 240000 600000
10000 320000 450000 450000 450000 450000 450000 435700 300000 735700
retailer buys 12000 280000 410000 540000 540000 540000 540000 497100 360000 857100
14000 240000 370000 500000 630000 630000 630000 522100 420000 942100
16000 200000 330000 460000 590000 720000 720000 518500 480000 998500
18000 160000 290000 420000 550000 680000 810000 491500 540000 1031500

Wholesaler 0.11 0.11 0.28 0.22 0.18 0.1

Profit 8000 10000 12000 14000 16000 18000 Next expected profit
8000 240000 240000 240000 240000 240000 240000 240000
10000 300000 300000 300000 300000 300000 300000 300000
12000 360000 360000 360000 360000 360000 360000 360000
14000 420000 420000 420000 420000 420000 420000 420000
16000 480000 480000 480000 480000 480000 480000 480000
18000 540000 540000 540000 540000 540000 540000 540000
Probability of sales Qty Continue with the earlier example
0.11 8000 Wholesaler selling price 80 per unit Profit (w) 30
0.11 10000 Wholesaler buying price 50 per unit profit 45
0.28 12000 Retailer Selling price 125 per unit loss 5
0.22 14000 Salvage price 75 per unit
0.18 16000 (retailer sells the unsold item to the wholesaler at salvage price)
0.1 18000

retailer Demand
0.11 0.11 0.28 0.22 0.18 0.1 Net expted profit
Profit 8000 10000 12000 14000 16000 18000 Retailer
8000 360000 360000 360000 360000 360000 360000 360000 240000 600000
10000 350000 450000 450000 450000 450000 450000 439000 283500 722500
retailer buys 12000 340000 440000 540000 540000 540000 540000 507000 310500 817500
14000 330000 430000 530000 630000 630000 630000 547000 295500 842500
16000 320000 420000 520000 620000 720000 720000 565000 247500 812500
18000 310000 410000 510000 610000 710000 810000 565000 172500 737500

Wholesaler 0.11 0.11 0.28 0.22 0.18 0.1

Profit 8000 10000 12000 14000 16000 18000 Next expected profit
8000 240000 240000 240000 240000 240000 240000 240000
10000 150000 300000 300000 300000 300000 300000 283500
12000 60000 210000 360000 360000 360000 360000 310500
14000 -30000 120000 270000 420000 420000 420000 295500
16000 -120000 30000 180000 330000 480000 480000 247500
18000 -210000 -60000 90000 240000 390000 540000 172500
360000
Probability of sales Qty
0.11 8000 Wholesaler selling price 65 per unit Profit (w) 15 24
0.11 10000 Wholesaler buying price 50 per unit profit (r ) 51
0.28 12000 Retailer Selling price 125 per unit loss (r ) 5
0.22 14000 Salvage price 60 per unit
0.18 16000 profit share 15%
0.1 18000

retailer Demand
0.11 0.11 0.28 0.22 0.18 0.1 Net expted profit
Profit 8000 10000 12000 14000 16000 18000 Retailer
8000 408000 408000 408000 408000 408000 408000 408000 192000 600000
10000 398000 510000 510000 510000 510000 510000 497680 238020 735700
retailer buys 12000 388000 500000 612000 612000 612000 612000 575040 282060 857100
14000 378000 490000 602000 714000 714000 714000 621040 321060 942100
16000 368000 480000 592000 704000 816000 816000 642400 356100 998500
18000 358000 470000 582000 694000 806000 918000 643600 387900 1031500

Wholesaler 0.11 0.11 0.28 0.22 0.18 0.1

Profit 8000 10000 12000 14000 16000 18000 Next expected profit
8000 192000 192000 192000 192000 192000 192000 192000
10000 222000 240000 240000 240000 240000 240000 238020
12000 252000 270000 288000 288000 288000 288000 282060
14000 282000 300000 318000 336000 336000 336000 321060
16000 312000 330000 348000 366000 384000 384000 356100
18000 342000 360000 378000 396000 414000 432000 387900
Probability of sales Qty
0.11 8000 Wholesaler selling price 80 per unit
0.11 10000 Wholesaler buying price 50 per unit
0.28 12000 Retailer Selling price 125 per unit
0.22 14000 Salvage price (R ) 60 per unit Salvage price (W ) 40 per unit
0.18 16000 Upto 2000 unsold items will be bought back at a selling price
0.1 18000

retailer Demand
0.11 0.11 0.28 0.22 0.18 0.1 Net expted profit
Profit 8000 10000 12000 14000 16000 18000 Retailer
8000 360000 360000 360000 360000 360000 360000 360000 240000 600000
10000 360000 450000 450000 450000 450000 450000 440100 291200 731300
retailer buys 12000 320000 450000 540000 540000 540000 540000 505900 342400 848300
14000 280000 410000 540000 630000 630000 630000 542100 380000 922100
16000 240000 370000 500000 630000 720000 720000 547300 422400 969700
18000 200000 330000 460000 590000 720000 810000 527500 468000 995500

Wholesaler 0.11 0.11 0.28 0.22 0.18 0.1

Profit 8000 10000 12000 14000 16000 18000 Next expected profit
8000 240000 240000 240000 240000 240000 240000 240000
10000 220000 300000 300000 300000 300000 300000 291200
12000 280000 280000 360000 360000 360000 360000 342400
14000 340000 340000 340000 420000 420000 420000 380000
16000 400000 400000 400000 400000 480000 480000 422400
18000 460000 460000 460000 460000 460000 540000 468000