Since the bookstore and the publisher are centralized, Dan should order books to maximize the expected profit of the publisher. This means that he should order the quantity that maximizes the expected revenue from sales minus the expected cost of goods sold (COGS). Revenue The revenue from sales is equal to the number of books sold times the retail price per book. Since demand is normally distributed, the expected revenue from sales is given by the mean of the normal distribution, which is 100 books * $28/book = $2800. Cost of Goods Sold The COGS is equal to the number of books sold times the unit cost of the book. The unit cost of the book is equal to the production-plus-shipping cost of $8/book plus the opportunity cost of the unsold books. The opportunity cost of the unsold books is equal to the wholesale price per book, which is $28/book * 75% = $21/book. Therefore, the COGS is equal to: Number of books sold * ($8/book $21/book) = $29/book * Number of books sold Expected Profit The expected profit is equal to the expected revenue minus the expected COGS. Expected Profit = $2800 - $29/book * Number of books sold