A Buyer for a Department Store Orders Sweaters About 6 $\leq$

Multiple Choice

A buyer for a department store orders sweaters about 6 months before the winter season. The store plans to hold a March clearance sale to sell any surplus goods by February 29. Each piece costs $100 per pair and sells for $120 per pair. At the sale price of $60 per pair, it is expected that any remaining stock can be sold during the March sale. Assume that a uniform probability distribution ranging from 250 to 450 items describes the demand. The expected demand is 300. In the context of the single period inventory system, the optimal order size Qmust satisfy the condition _____.

A) P(demand $\leq$ Q*) = 1/2
B) P(demand $\leq$ Q*) = 1/3
C) P(demand $\leq$ Q*) = 1/4
D) P(demand $\leq$ Q*) = 1/5