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1. (15 points) The UMN bookstore is stocking a new textbook for a course that will be offered only once. The book will cost them
1. (15 points) The UMN bookstore is stocking a new textbook for a course that will be offered only once. The book will cost them $40 per copy (including all shipping and handling costs), and will retail for $60. After the course is over, the book can be sold to a used bookseller at $10 per copy. The bookstore estimates that demand for the textbook is distributed D~N(60, 252). Printing a copy of the textbook (including royalty fees, etc.) costs the publisher, ABCU Press, $14. (a) What order quantity maximizes the bookstore's expected profit? (b) What is the UMN bookstore's expected profit on this textbook? (c) What is ABCU Press' expected profit on this textbook? 1. (15 points) The UMN bookstore is stocking a new textbook for a course that will be offered only once. The book will cost them $40 per copy (including all shipping and handling costs), and will retail for $60. After the course is over, the book can be sold to a used bookseller at $10 per copy. The bookstore estimates that demand for the textbook is distributed D~N(60, 252). Printing a copy of the textbook (including royalty fees, etc.) costs the publisher, ABCU Press, $14. (a) What order quantity maximizes the bookstore's expected profit? (b) What is the UMN bookstore's expected profit on this textbook? (c) What is ABCU Press' expected profit on this textbook
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