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As a newspaper distributor in Chicago, you are attempting to minimize oversupply to maximize profits. When you purchase the newspapers from the printer, you buy
As a newspaper distributor in Chicago, you are attempting to minimize oversupply to maximize profits. When you purchase the newspapers from the printer, you buy the days paper for $ a copy. You sell a copy of the paper for $ Daily demand is distributed normally with mean and standard deviation At the end of each morning, any leftover copies are worthless and they go to a recycle bin.
a How many copies of the newspaper should you buy each morning? Use Excel's NORMSINV function to find the Zscore. Round intermediate calculations to four decimal places. Round your answer to the nearest whole number.
Optimal order quantity
b Based on part a above, what is the probability that you will run out of stock? Round your answer to the nearest whole percent.
Probability
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