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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.)

Respuesta :

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.

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