Question: Question 2 : ( 5 points ) Inventory Management ( Single Period Inventory Model ) Newspaper Boy Problem: Daily demand for a newspaper is independent
Question : points Inventory Management Single Period Inventory Model
Newspaper Boy Problem: Daily demand for a newspaper is independent and identical. Demand can be characterized as the following probability distribution:
tableDemand in units,Probability
The cost of the newspaper is $ The newspaper is sold to customers for a price of $ each. At the end of the day, any unsold newspapers have to be returned to the publisher and yield a revenue of $ per copy.
A How many newspapers will be optimal to be inventoried at the start of the day, so the expected profit is maximum?
B What are the expected average profits for each stock inventory level? Simulate for days and draw your conclusions. Use only the random numbers provided to generate demand.
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