The number of light bulbs of a certain type (measured in hundreds), sold by a large store
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The number of light bulbs of a certain type (measured in hundreds), sold by a large store during a year, is a random variable X having the distribution function
The profit that the store makes for each lightbulb sold is $1. If by the end of a year, a lightbulb has not been sold, it results in a loss of $0.2 to the store.
(i) Calculate the expected profit of the store if, at the beginning of a year, it makes an order for y hundreds of light bulbs.
(ii) What is the quantity y that the store must order in order to maximize its expected profit?
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Related Book For
Introduction To Probability Volume 2
ISBN: 9781118123331
1st Edition
Authors: Narayanaswamy Balakrishnan, Markos V. Koutras, Konstadinos G. Politis
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