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Grace is organizing a party. The number of guests who will show up to the party is uncertain but she need to buy drinks ahead
Grace is organizing a party. The number of guests who will show up to the party is uncertain but she need to buy drinks ahead of time. Grace believes that the number of drinks the guests will have follows normal distribution with mean 75 and standard deviation 4 . The price of a beverage is $5 at the grocery store. If she runs out of drinks during the party, she can go get some more at the local convenience store but at a higher price at $8 for each drink. Answer the questions below: 4. Now ignores the assumption in Question 3. To reduce the potential loss of overstock, Grace talked to her cousin. He agreed that if Grace is left with some drinks at the end of the party, he will buy them from her at a price of $3 per drink. Now, how many drinks should Grace buy before the party starts if her objective is to minimize the expected cost
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