2. Orders for clothing from a particular manufacturer for this year’s Aidil Fitri shopping
season must be placed in January. The cost per unit baju kurung is RM20 while the
anticipated selling price is RM50. Demand is projected to be 50, 60 and 70. There is a
40% chance that demand will be 50 units, a 50% chance that demand will be 60 units,
and 10% chance that the demand will be 70 units. The company believes they can sell
any leftover goods to a discount store, but the they are uncertain as to the price the
discount store will pay.
a. Develop the payoff table for the problem. (6 Marks)
b. For what price to be paid by the discount store would they order 70 cases of
dresses in January? (2 Marks)