You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.35 a copy. You sell a copy of San Pedro Times for $130. Daily demand is distributed normally with mean =300 and standard deviation=60. At the end of each morning, any leftover copies are worthless, and they go to the recycle bin. How many copies of San Pedro Times should you buy each morning? (Use the excels NORMSINV( ) function to find the critical value for the given a-level, (Round you z-value to 2 decimal places and final answer to 2 decimal places.) Optimal order quantity = Based on a, what is the probability that you will run out of stock? ( Round to nearest whole number) Probability =

Answer: Given data, cost (C)=$0.35 selling price (S)=$130 mean (x)=300 standard deviation (μ)=60…

Answered: You are a newsvendor selling San Pedro…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.35 a copy. You sell a copy of San Pedro Times for $130. Daily demand is distributed normally with mean =300 and standard deviation=60. At the end of each morning, any leftover copies are worthless, and they go to the recycle bin.

How many copies of San Pedro Times should you buy each morning? (Use the excels NORMSINV( ) function to find the critical value for the given a-level, (Round you z-value to 2 decimal places and final answer to 2 decimal places.)

Optimal order quantity =