Question
The first edition hardcover of a new book by a popular writer has a demand which is normally distributed with an expected value of
The first edition hardcover of a new book by a popular writer has a demand which is normally distributed with an expected value of 1.5 million and a standard deviation of 600k. The production and transportation costs per hardcover are $10, and the sale price in bookstores is $25. When the paperback version comes out, the hardcover books go on sale for $5. How many hardcovers should be produced? Hint: Find C and C, and then use the graph from a previous problem to find the z-score. Then add z*sigma to the expected demand.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
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