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Consider the newsboy problem. The newspaper vendor ordered 100 newspaper from the supplier in anticipation of demand for newspaper the next day. The news vendor

Consider the newsboy problem. The newspaper vendor ordered 100 newspaper from the supplier in anticipation of demand for newspaper the next day. The news vendor calculates the expected profit to be $150. Later, the news vendor computed the critical ratio of the problem as 0.57. the probabilities of possible demand of the news paper are shown in table 1. Analyse whether the quantity the news vendor order is the best quantity to maximise the expected profit.

Demand

Probability

25 0.10
50 0.15
75 0.20
100 0.30
125 0.15
150 0.10

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