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. 3 4 2 2 3 4 2 3 p(x) 16 16 16 16 16 16 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.) $ 11.75 What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.) $
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. 3 4 2 2 3 4 2 3 p(x) 16 16 16 16 16 16 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.) $ 11.75 What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.) $
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter2: Equations And Inequalities
Section2.1: Equations
Problem 70E
Related questions
Question
![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
2
3
4
2
3
p(x)
16
16
16
16
16
16
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.)
$ 11.75
What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.)
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7e43dbe-ab72-46fa-955b-a8f42ce6613a%2Fcdb54601-2cb0-44cd-aead-6d76a984f503%2Fj0q2ri8_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
2
4
5
6
2
2
3
4
2
3
p(x)
16
16
16
16
16
16
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.)
$ 11.75
What is the expected profit if four magazines are ordered? (Round your answer to two decimal places.)
%24
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