The local paper delivery person has to purchase daily newspapers prior to reselling them. Newspapers cost $0.75 each, and can be sold for $1.25 each. At the end of each day, the paper deliverer can resell each paper for $0.05 each to a local recycler.
 The average daily demand for newspapers is 150 with a standard deviation of 30 newspapers.
• How many newspapers should the paper deliverer purchase each day to maximize expected profit?

Answer rating: 100% (QA)

To maximize expected profit the paper deliverer should find the optimal quantity to purchase each da... View the full answer