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Cyrus, the manager of New York University bookstore, wants to order T-shirts to celebrate their end of semester. Based on his experience, he estimates his
Cyrus, the manager of New York University bookstore, wants to order T-shirts to celebrate their end of semester. Based on his experience, he estimates his demand distribution as follows.
Demand (units of T-shirts) (column 1 ) Probability (column 2)
80 0.30
81 0.25
90 0.10
100 0.10
110 0.25
Cyrus plans to sell the T-shirts for $30 each. He pays his supplier $15 for each shirt and can sell any unsold shirts at $10 each. Determine how many T-shirts Cyrus should order to maximize his expected profit. Calculate the profit for the optimal quantity order.
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