Rodney, who sells newspapers on the street, buys each newspaper for 35 cents and he sells it

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Rodney, who sells newspapers on the street, buys each newspaper for 35 cents and he sells it for 50 cents. However, he cannot return any unsold newspapers. He has estimated that the number of newspapers he sells daily has a negative binomial distribution with parameters r = 25 and p = 2∕5. Find how many newspapers he should buy so that he maximizes his expected profit.

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Introduction To Probability Volume 2

ISBN: 9781118123331

1st Edition

Authors: Narayanaswamy Balakrishnan, Markos V. Koutras, Konstadinos G. Politis

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