A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with pmf 1 3 4 5 P(x) 15 4 15 15 15 15 Suppose the store owner actually pays $2.00 for each copy of the magazine and the price to customers is $4.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine? [Hint: For both three and four copies ordered, express net revenue as a function of demand X, and then compute the expected revenue.]
A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with pmf 1 3 4 5 P(x) 15 4 15 15 15 15 Suppose the store owner actually pays $2.00 for each copy of the magazine and the price to customers is $4.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine? [Hint: For both three and four copies ordered, express net revenue as a function of demand X, and then compute the expected revenue.]
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
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![**Problem 35: Magazine Demand and Ordering Strategy**
A small market orders copies of a certain magazine for its magazine rack each week. Let \( X \) represent the demand for the magazine, with the probability mass function (pmf) given as follows:
\[
\begin{array}{c|cccccc}
x & 1 & 2 & 3 & 4 & 5 & 6 \\
\hline
p(x) & \frac{1}{15} & \frac{2}{15} & \frac{3}{15} & \frac{4}{15} & \frac{3}{15} & \frac{2}{15} \\
\end{array}
\]
**Scenario:**
The store owner pays $2.00 for each copy of the magazine and sells it to customers for $4.00. If there are magazines left at the end of the week, they have no salvage value.
**Objective:**
Determine whether it is more beneficial to order three or four copies of the magazine.
**Hint:** For both three and four copies ordered, express the net revenue as a function of demand \( X \), and then compute the expected revenue.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f9cc468-5045-4ba5-8445-556d55f6f682%2F21c2d88e-8305-4b3c-a5e8-1e03e8c24d76%2F7qigbv8_processed.png&w=3840&q=75)
Transcribed Image Text:**Problem 35: Magazine Demand and Ordering Strategy**
A small market orders copies of a certain magazine for its magazine rack each week. Let \( X \) represent the demand for the magazine, with the probability mass function (pmf) given as follows:
\[
\begin{array}{c|cccccc}
x & 1 & 2 & 3 & 4 & 5 & 6 \\
\hline
p(x) & \frac{1}{15} & \frac{2}{15} & \frac{3}{15} & \frac{4}{15} & \frac{3}{15} & \frac{2}{15} \\
\end{array}
\]
**Scenario:**
The store owner pays $2.00 for each copy of the magazine and sells it to customers for $4.00. If there are magazines left at the end of the week, they have no salvage value.
**Objective:**
Determine whether it is more beneficial to order three or four copies of the magazine.
**Hint:** For both three and four copies ordered, express the net revenue as a function of demand \( X \), and then compute the expected revenue.
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