Use this information for the News Vendor Problem. x is a product, like calendars we covered in class. The probability of each discrete demand is shown in the table below. The sales price per unit is $2,500. The cost per unit is $1,800. The return price is $1,700. Thus the understock cost per unit (c_o) equals $2,550 - $1,800 = $750, and the overstock cost per unit (c_u) is $1,800 - $1,600 = $200.

x	P(x)
100	0.02
110	0.05
120	0.08
130	0.09
140	0.11
150	0.16
160	0.20
170	0.15
180	0.08
190	0.05
200	0.01

What is the expected number of calendars sold, expected understock cost and expected overstock cost and the expected total cost if 190 calendars are ordered?

Expected sales =

Expected understock cost =

Expected overstock cost

Expected total cost =

What is the expected number of calendars sold, expected understock cost and expected overstock cost and the expected total cost if 200 calendars are ordered?

Expected sales =

Expected understock cost =

Expected overstock cost =

Expected total cost =

Which level of ordered calendars gives the lowest expected total cost?

Draw a graph showing the expected total cost on the vertical axis and the order numbers, 100, 110, , 200 on the horizontal axis.

What is the optimal number to order using the formula P(Dq) c_u/(c_u + c_o)? Is this the same answer as in 1.13 above?