Find expected first-period revenue-salvage revenue

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Reference no: EM132163324

A seller is facing his last markdown opportunity. He has a fixed inventory x and must set the price p for which it will be sold during the upcoming period. At the end of that period, any remaining unsold inventory will be sold for the salvage price r. Assume that D(p) follows a uniform distribution between 0 and a - bp with a = 200 and b = 10. Find expected first-period revenue, salvage revenue and total revenue for prices $2, $5 and $8, if salvage value is $5 and inventory is 70.

Reference no: EM132163324

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