Question
After looking more closely at their data, Simon volunteers are able to narrow down their estimate of the demand distribution. Instead of any number between
After looking more closely at their data, Simon volunteers are able to narrow down their estimate of the demand distribution. Instead of any number between 37 and 42 being equally likely, they estimated that at $10 a pie, the demand will be for 41 pies with 50% probability, for 40 pies with 25% probability, and for 42 pies with 25% probability. a. Sketch out an inverse cumulative distribution plot for this demand distribution. Given this new understanding of the demand distribution, b. how many pies should they bake? c. what will be the probability that they won't satisfy all the demand? d. what will be their expected profit? e. what is the probability that they will get exactly the profit in (d) ?
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