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 4 1 1 3 2 3 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.) $ How many magazines should the store owner order? O 3 magazines O 4 magazines 2. %24
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 4 1 1 3 2 3 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.) $ How many magazines should the store owner order? O 3 magazines O 4 magazines 2. %24
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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![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
4
1
1
3
2
3
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.)
$
How many magazines should the store owner order?
O 3 magazines
O 4 magazines
2.
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d158991-3671-4459-aef6-bd0615668acc%2F3deb1b32-6c8c-4bce-9a63-cf4e0038ccfa%2Fcwpt66_processed.png&w=3840&q=75)
Transcribed Image Text: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
4
1
1
3
2
3
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.)
$
How many magazines should the store owner order?
O 3 magazines
O 4 magazines
2.
%24
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