Question
A company sells its product both in its store and via Internet. The selling price for each product is$10 regardless of whether it is sold
A company sells its product both in its store and via Internet. The selling price for each product is$10 regardless of whether it is sold in the store or via the Internet. The unit cost of each stocked item is $4. Any unsold item is scrapped due to spoilage. The daily in-store demand for the product is exponentially distributed with a mean of 50. The demand via Internet is also distributed exponentially with a mean of 50 units. (a) What is the amount of expected sales if the company carries 80 units of stock? (b) Compute the expected profit under this case.
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