The way to maximize the profit of the company. Linear programming: It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

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Barbara Flynn sells papers at a newspaper stand for $0.40. The papers cost her $0.30, giving her a $0.10 profit on each one she sells. From past experience Barbara knows that: a) 20% of the time she sells 150 papers. b) 20% of the time she sells 200 papers. c) 30% of the time she sells 250 papers. d) 30% of the time she sells 300 papers. Assuming that Barbara believes the cost of a lost sale to be $0.05 and any unsold papers cost her $0.30 and she orders 250 papers. Use the following random numbers: 14, 4, 13, 9, and 25 for simulating Barbara's profit. (Note: Assume the random number interval begins at 01 and ends at 00.) Based on the given probability distribution and the order size, for the given random number Barbara's sales and profit are (enter your responses for sales as integers and round all profit responses to two decimal places): Random Number Sales Profit 14 4 13 9 25

Answer 1

Question

Chapter 4, Problem 64P

Summary Introduction

To determine: The way to maximize the profit of the company.

Linear programming:

It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

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