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(15 points) Alfonso is a newsvendor at the corner of your street. He orders newspapers from his supplier every early morning to sell during the
(15 points) Alfonso is a newsvendor at the corner of your street. He orders newspapers from his supplier every early morning to sell during the day. The demand for the newspapers on each day is unknown, and Alfonso has to order the newspapers in the presence of this demand uncertainty. a) (6 points) For the local newspapers, the unit cost of ordering is $3, and the sales price of each newspaper is $7. The remaining newspapers at the end of the day can be returned to the supplier for $1. The unmet demand is lost. Historical data shows that the demand for the local newspapers can be 300, 400 or 500 newspapers per day with probability of 0.4, 0.3 and 0.3 respectively. How many local newspapers (300, 400, or 500) should Alfonso order every morning to maximize his expected profits? Please construct the payoff table
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