A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with the following pmf. 1 2 3 4 5 6 1 15 15 2 4 4 2 P(x) 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.] What is the expected profit if three magazines are ordered? (Round your answer to two decimal places.) What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.) 24
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
![A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with the following pmf.
1
2
4
5
6
2
1
4
4
2
2
p(x)
15
15
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.]
What is the expected profit if three magazines are ordered? (Round your answer to two decimal places.)
$
What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.)
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa40c3d47-e58e-414f-9d76-62020f938a7d%2F34d35d9c-e33d-4508-b224-4189719601a8%2Fkylgneg_processed.png&w=3840&q=75)
(a) Expected profit if 3 magazine are ordered
E[X] =
=
= 1.0666
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