MATH SOLVE

2 months ago

Q:
# A bookstore must decide on how many calendars to order for the next year. Each calendar costs $2 and is sold for $4.50. After January 1, any unsold calendars are returned to the publisher for a refund of $0.75 each. The distribution of demand is uniform between 100 and 300. How many calendars should the bookstore order? (Show all equations and calculations.)

Accepted Solution

A:

Answer: The book store should order 200 calendar to maximise his profit.Step-by-step explanation:Since we have given that Profit on selling calendar is given by[tex]\$4.50-\$2\\\\=\$2.50[/tex]Loss on selling calendar is given by[tex]\$2.00-\$0.75\\\\=\$1.25[/tex]Expected sales would be [tex]\dfrac{100+300}{2}=\dfrac{400}{2}=200[/tex]so, expected profit on 200 sales would be [tex]200\times \$2.50\\\\=\$500[/tex]It is the maximum profit he can get.So, the book store should order 200 calendar to maximise his profit.