posted by Steve .
I believe over the next year I am going to sell 250,000 units. However, there is a 15% chance I will only sell 120,000 and 5% chance that I will only sell 40,000 units. What equation should I use to determine my demand?
0.8 x 250,000 + 0.15 x 120,000 + 0.05 x 40,000 = 220,000
This assumes that there is still an 80% chance that you will sell 250,000.