A seller stocks at the beginning of the day an item that perishes that same day. On any given day the demand is either 1, 2, 3 or 4 items with probabilities 0.02, 0.05, 0.33 and 0.6. Each item costs to the seller $1 and he sells them for $1.16 each. If an item cannot be sold in the same day, the item perishes and it is a total loss for the seller. Compute the number of items that should be stocked at the beginning of the day to maximize seller's expected daily profit?

A seller stocks at the beginning of the day an item that perishes that same day. On any given day the demand is either 1, 2, 3 or 4 items with probabilities 0.02, 0.05, 0.33 and 0.6. Each item costs to the seller $1 and he sells them for $1.16 each. If an item cannot be sold in the same day, the item perishes and it is a total loss for the seller. Compute the number of items that should be stocked at the beginning of the day to maximize seller's expected daily profit?

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Description: A seller stocks at the beginning of the day an item that perishes that same day. Onany given day the demand is either 1, 2, 3 or 4 items with probabilities 0.02, 0.05,0.33 and 0.6. Each item costs to the seller $1 and he sells them for $1.16 each. I

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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