Question: 1 . ( Returning books ) Dan McClure is trying to decide on how many copies of a book to purchase at the start of

1.(Returning books) Dan McClure is trying to decide on how many copies of a book to
purchase at the start of the upcoming selling season for his bookstore. The book retails at $28.00. The publisher sells the book to Dan for $20.00. Dan will dispose of all the unsold copies of the book at 75 percent off the retail price, at the end of the season. Dan estimates that demand for this book during the season is normal with a mean of 100 and a standard deviation of 42.
a. How many books should Dan order to maximize his expected profit?
d. How many books should Dan order to maximize his expected profits given the buy-back offer?
g. Suppose the publisher continues to charge $20 per book and Dan still incurs a $1 cost to ship each book back to the publisher. What price should the publisher pay Dan for returned books to maximize the supply chains profit (the sum of the publishers profit and Dans profit)?

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