Josh sells Sunday papers outside a retirement home on Sunday mornings. The daily demand for his newspapers is normally distributed with an expected...
View the step-by-step solution to:

Question

Josh sells Sunday papers outside a retirement home on Sunday mornings. 

The daily demand for his newspapers

is normally distributed with an expected demand of 100 and a standard deviation of 20.


Josh collects $1.75 per paper and pays $0.98 for a paper. The retirement home residents think fondly of Josh and aren't too upset when papers run out.

On the other hand, any papers Josh is left with are thrown into the recycling bin. In other words, when Josh runs out of papers, the sale is lost.

Josh is trying to figure out a systematic ordering policy.


What is Josh's optimal (profit-maximizing) order quantity for this situation?

Top Answer

Here is the solution... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question