ou have a fruit stand. At the beginning of each week, you order some fruit, and sell it retail at a 100% markup. For example, a piece of fruit that you sell retail for $5 cost you $2.50. At the end of the week, any fruit not sold is sold to a juicer for 40% of what you paid for it (or 20% of the retail price). (For example, you pay $2.50 for a piece of fruit, which you can sell retail for $5, but if you don't sell it retail you can sell it to a juicer for $1.) The average amount of fruit that your customers want to purchase that week is $10,000 (Retail. In other words, you paid 5,000 for it.). This amount is distributed normally, with a standard deviation of $1,000. To maximize your long term profits, how much fruit (in terms of retail price) should you purchase each week? Round, if necessary, to the nearest $10.
You have a fruit stand. At the beginning of each week, you order some fruit, and sell it retail at a 100% markup. For example, a piece of fruit that you sell retail for $5 cost you $2.50. At the end of the week, any fruit not sold is sold to a juicer for 40% of what you paid for it (or 20% of the retail price). (For example, you pay $2.50 for a piece of fruit, which you can sell retail for $5, but if you don't sell it retail you can sell it to a juicer for $1.)
The average amount of fruit that your customers want to purchase that week is $10,000 (Retail. In other words, you paid 5,000 for it.). This amount is distributed normally, with a standard deviation of $1,000. To maximize your long term profits, how much fruit (in terms of retail price) should you purchase each week? Round, if necessary, to the nearest $10.
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