Suppose I have ordered 140 Unities. On average, how many of them are sold? In other words, what is the expected value of the number of sold units? When I can sell all 140 units? I can sell all 140 units if  R≥ 140 Prob(R≥ 140) = 0.76 The expected number of units sold –for this part of the problem- is (0.76)(140) = 106.4 Also, there is 0.02 probability to sell 100 units 2 units Also, there is 0.05 probability to sell 110 units5.5 Also, there is 0.08 probability to sell 120 units 9.6 Also, there is 0.09 probability to sell 130 units 11.7 106.4 + 2 + 5.5 + 9.6 + 11.7 = 135.2

Suppose I have ordered 140 Unities. On average, how many of them are salvaged? In other words, what is the expected value of the number of sold units? 0.02 probability to 100 units. In that case 40 units are salvaged  0.02(40) = .8 0.05 probability to sell 110  30 salvage 0.05(30)= 1.5 0.08 probability to sell 120  20 salvage 0.08(20) = 1.6 0.09 probability to sell 130  10 salvage 0.09(10) =0.9 0.8 + 1.5 + 1.6 + 0.9 = 4.8 Expected value of the units solved 135.2 @ 700 = 94640 Expected value of the units salvaged 4.8 @ -100 = -480 Expected Profit = 94640 – 480 = 94,160

Additional questions The expected value of demand is computed as the sumproduct of the first two columns, and it is equal to 151.6 == 152. Suppose we have ordered 152 units. What is the probability of demand being equal to 152? Suppose we have ordered 152 units. What is the probability of selling all units. How many units should we order to have the expected value of the number of units sold equal to 151.6