A news vendor wants to decide on the number of magazines to order for the next day. Based on his experience, he believes that demand for the magazine would range from 400–900 based on the following probability distribution table:

Each magazine costs LE 7.00 and is sold for LE 10.00. Any unsold magazine can be returned to the publisher for a partial refund of LE 1.00.
a) Construct the table of conditional profits.
b) How many copies should the news vendor order to maximize the EMV?

Transcribed Image Text:

Demand 400 Probability 0.2 500 0.2 600 0.2 700 0.2 800 0.1 900 0.1