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A new edition of a very popular textbook will be published a year from now. The publisher currently has 1,000 copies on hand and is
A new edition of a very popular textbook will be published a year from now. The publisher currently has 1,000 copies on hand and is deciding whether to do another printing before the new edition comes out. The publisher estimates that demand for the book during the next year is governed by the probability distribution in the file P10_31.xlsx. A production run incurs a fixed cost of $15,000 plus a variable cost of $20 per book printed. Books are sold for $190 per book. Any demand that cannot be met incurs a penalty cost of $30 per book, due to loss of goodwill. Up to 1,000 of any leftover books can be sold to Barnes and Noble for $45 per book. The publisher is interested in maximizing expected profit. The following print-run sizes are under consideration: 0 (no production run) to 16,000 in increments of 2,000. Use simulation with 1,000 replications. DemandProbability 30000.20 40000.35 50000.25 60000.10 80000.05 100000.05 For your optimal decision, the publisher can be 90% certain that the actual profit associated with remaining sales of the current edition will be between what two values? If needed, round your answers to whole dollar amounts
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