Question 2. A classical inventory problem concerns the purchase and sale of newspapers. The paper seller buys the papers for 1.5 Halalas each and sells them for 3 Riyals each. Newspapers not sold at the end of the day are sold as scrap for 30 Halalas each. Newspapers can be purchased in bundles of 10. Thus, the paper seller can buy 50, 60, and so on. There are three types of Newsday's, good, fair, and poor with probabilities of 0.30, 0.45, and 0.25, respectively. The distribution of papers demanded on each of these days is given in table. The problem is to determine the total profit. This will be accomplished by simulating demands for 30 days and recording profits from sales each day. The distribution of demand for newspapers by type today is given in the following table: Demand 40 50 60 70 80 90 100 Good 0.02 0.06 0.20 0.15 0.18 0.32 0.07 Demand Probability Distribution Fair 0.12 0.16 0.35 0.25 0.08 0.04 0.00 Poor 0.33 0.26 0.18 0.15 0.08 0.00 0.00 Determine the optimal number of newspapers that a newspaper seller buys daily in order to achieve the highest profit. Simulate 30 days using EXCEL to find out what is required of whether the seller buys 80,70,60,50 newspapers per day. Note: Profits are calculated from the formula: P=R-C-L-S Where the symbols mean: (Profits) P = Profit (Total Sales Amount) R = Revenue from sales (Cost of newspapers) C = Cost of newspapers (Lost Profits from Not Fulfilling Order) (Refunded Amount from Selling Remaining Newspapers) L = Lost profit from excess demand S = salvage from sale of scrap papers