1 In August 2003, a car dealer is trying to determine how many 2004 models should be ordered. Each car costs the dealer $10,000. The demand for the dealer’s 2004 models has the probability distribution shown in Table 4. Each car is sold for $15,000. If the demand for 2004 cars exceeds the number of cars ordered in August, the dealer must reorder at a cost of $12,000 per car. If the demand for 2004 cars falls short, the dealer may dispose of excess cars in an endof-

model-year sale for $9,000 per car. How many 2004 models should be ordered in August?

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TABLE 4 No. of Cars Demanded Probability 20 .30 25 .15 30 .15 35 .20 40 .20