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rec4problems

# rec4problems - OR 2700 Spring'09 Section 4 Section 4 Feb 16...

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OR 2700, Spring’09 Section 4 Section 4 Feb 16 and Feb 17, 2009. Problem 1 (Devore 3.35) A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with pmf x 1 2 3 4 5 6 p(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 the price to customers is \$2.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine? ( Hint: For both three and four copies ordered, express net revenue as a function of demand X , and then compute the expected revenue.) Problem 2 (Devore 3.52, modified) Suppose that 30% of all students who have to buy a text for a particular course want a new copy, whereas the other 70% want a used copy. Consider randomly selecting 25 purchasers. a. What are the mean value and standard deviation of the number who want a new copy of the book? b. What is the probability that the number who want new copies is more than two standard deviations away from the mean value?

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rec4problems - OR 2700 Spring'09 Section 4 Section 4 Feb 16...

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