How many cases of kombucha to order


Question: You work for a small retail store. You must decide how many cases of kombucha to order. Twenty cases fit on a pallet and because of shipping costs, orders must be placed in multiples of 20. You can either order 20, 40, 60, 80 or 100 cases. Each case costs $15. If you order more than 1 pallet, you receive a discount of 5% per additional pallet ordered (2 pallets would be 5%, 3 would be 10%, etc). The cases can be sold for $25 each. Any that are left unsold can be sold to a discount store for $10. Your records suggest that the probability that you will sell 25 cases is 20%, 45 cases is 45%, 65 cases is 20% and 85 cases is 15%.

 

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