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A newsstand operator assigns probabilities to the demand for Fine magazine: . Event: Demand 1 0 copies 1 1 copies 1 2 copies 1 3
A newsstand operator assigns probabilities to the demand for Fine magazine:
Event: Demand
copies copies copies copies copies
Probability of Event
Issues sell for cents and cost cents.
a If the operator can return and cost cents.
b If the operator cannot return any unsold copies for full credit, how many should be ordered?
c What is the optimum expected profit in b
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