Question

A weekly sports magazine publishes a special edition for the 2009 Ashes. The sales forecast is for the number of copies to be normally distributed with mean 800 000 copies and standard deviation 60 000 copies. It costs £.35 to print a copy, and the newsstand price is £1.95. Unsold copies will be scrapped. How many copies should be printed?

Answer 1

Cu = 1.95 -0.35 = 1.6

C0 = 0.35

Cu / (Cu+ C0) = 1.6 /1.95 = 0.82

Z < 0.84 = 0.80

Copies to be printed = 800,000 + 60,000 * 0.84 = 850400