A newspaper office buys a copy of a magazine $ 0.5 and sells it for $1.4....

  

Transcribed Image Text:

A newspaper office buys a copy of a magazine $ 0.5 and sells it for $1.4. At end of the day, they can retum each unsold copy for $0.3. The newspaper office expects a uniformly distributed daily demand between 136 and 322. How many copies should the newspaper office order to maximize their expected profit? [Hint: if a value is uniformly distributed between a and b, it's possibility to be minimum X is F(x)=(x)/(-a)] A newspaper office buys a copy of a magazine $ 0.5 and sells it for $1.4. At end of the day, they can retum each unsold copy for $0.3. The newspaper office expects a uniformly distributed daily demand between 136 and 322. How many copies should the newspaper office order to maximize their expected profit? [Hint: if a value is uniformly distributed between a and b, it's possibility to be minimum X is F(x)=(x)/(-a)]

Answer rating: 100% (QA)

To determine the optimal order quantity we need to consider the profit from selling a maga... View the full answer