Question 347515: Dear tutors I would be very grateful for you help to this question :
A small drugstore orders copies of a certain magazine for its magazine rack each week. Let X equal the demand for the magazine, that is, the number of customers who desire to buy the magazine in a week. Assume the pmf of X is as follows:
X: 1 2 3 4 5 6
f(x): 1/15 2/15 3/15 4/15 3/15 2/15
Suppose the store owner actually pays $1.00 for each copy of the magazine and charges customers $2.00. If the magazines have no salvage value, is it better to order 3 or 4 copies of the magazine? Hint: Consider the expected profit to the drugstore
Answer by solver91311(24713)   (Show Source):
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