Question

LGE 4513 Lab 3 Student Name A newspaper boy buys paper for AED 1.40 and sells them for AED 2.45. He cannot return unsold newspaper. Daily demand has the following distributions. of customers Probability 25 0.03 26 0.05 27 0.05 28 0.10 29 0.15 30 0.15 31 0.12 32 0.10 33 0.10 34 0.07 35 0.06 36 0.02 If each days demand is independent of the previous days, how many papers he should order each day?

Answer 1

Since the events are independent, we calculate the number of newspapers he should order daily by multiplying number of customer and their expected probability.

Number of customers Probability Expected value 0.03 0.75 0.05 1.3 0.05 1.35 0.1 2.8 0.15 4.35 0.15 0.12 3.72 0.1 3.2 0.1 3.3 0.07 2.38 0.06 0.02 0.72 4.5 2.1 Sum 30.47 He should order approximately 30 papers daily