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Question 4 A coffee shop needs to stock a certain amount of coffee beans to keep up with demands. The coffee shop earns a profit
Question
A coffee shop needs to stock a certain amount of coffee beans to keep up with demands. The coffee shop
earns a profit of dollars for every ton of beans sold. However, due to the perishable nature of coffee
beans, any unsold stock incurs a loss of b dollars per ton, as the beans lose their freshness and have to
be disposed of The demand for the coffee beans, measured in tons, is a random variable that follows
an exponential distribution with parameter What is the optimal amount of coffee beans to stock in
order to maximize the expected profit?
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