Question

The demand for next​ year's wildlife calendar at a bookstore is assumed to be normally distributed with a mean of 510 and a standard deviation of 80 . The calendar costs the bookstore ​$4.20 each and will be sold for ​$15 each. Any calendars remaining for sale after Christmas will be discounted and sold for ​$0.7 each. The bookstore believes any calendar remaining to be sold after Christmas can be cleared at the ​$1 price. How many wildlife calendars should the bookstore stock if it wants to maximize its expected profit from wildlife​ calendars?  

Answer 1

solution: - Given that values normal distributed with a mean = 510 Standard deviation = 80 Calendea Costy the bookstore - $4.20 each and will be sold for = $15 . discounted and sold foszfo. 7 Calendea gemaining to be sold after choistmas car be cleared at the $1 price The cast outage co= cost - Salvage value . .. 4.2-0.7 - 3.5 Cost of underage cu- price cost 15 - U.2 10.8. . . colitical ratio cu 10.8 Clutco 10.8735 E corresponds to z which 0-755 = 0.69 [ztable

Optimum Oader quantity Q - mu+zxS.D = 610+0.69x80 :562.5