Question

A weekly sports magazine publishes a special edition for the World Series. The sales forecast is for the number of copies to be normally distributed with mean 800,000 copies and standard deviation 60,000 copies. It costs $0.35 to print a copy, and the newsstand price is $1.95. Unsold copies will be scrapped. How many copies should be printed?

Answer 1

Answer:

$849,200

Explanation:

Selling price - Costs price

=$1.95-$0.35

=$1.6

P(demand < Q*) = 1.6/1.95

=0 .8205

Hence;

Q* = 800,000 +0 .82(60,000)

=800,000+49,200

= 849,200

Therefore 849,200 copies should be printed.