Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7) [6] You have a fruit stand. At the beginning of each week, you order some fruit, and sell it retail at a 100% markup.

image text in transcribed
7) [6] You have a fruit stand. At the beginning of each week, you order some fruit, and sell it retail at a 100% markup. For example, a piece of fruit that you sell retail for '5 cost you $2.50. At the end of the week any fruit not sold is sold to a juicer for 40% of what you paid for it (or 20% of the retail price). (For example, you pay '2.50 for a piece of fruit, which you can sell retail for $5, but if you don't sell it retail you can sell it to a juicer for 1.) The average amount of fruit that your customers want to purchase that week is $10,000 (Retail. In other words, you paid $5,000 for it.). This amount is distributed normally, with a standard deviation of 1,000. To maximize your long term profits, how much fruit (in terms of retail price) should you purchase each week? Round, if necessary, to the nearest $10. 7) [6] You have a fruit stand. At the beginning of each week, you order some fruit, and sell it retail at a 100% markup. For example, a piece of fruit that you sell retail for '5 cost you $2.50. At the end of the week any fruit not sold is sold to a juicer for 40% of what you paid for it (or 20% of the retail price). (For example, you pay '2.50 for a piece of fruit, which you can sell retail for $5, but if you don't sell it retail you can sell it to a juicer for 1.) The average amount of fruit that your customers want to purchase that week is $10,000 (Retail. In other words, you paid $5,000 for it.). This amount is distributed normally, with a standard deviation of 1,000. To maximize your long term profits, how much fruit (in terms of retail price) should you purchase each week? Round, if necessary, to the nearest $10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Arshad Ahmad, Jordan Fortino

6th Canadian edition

1259453146, 978-1259453144

More Books

Students also viewed these Finance questions