Achieving highest expected value

Assignment Help Business Management

Reference no: EM1333535

An Universities' bookstore stocks textbooks based on departmental forecasts and pre-registration records to determine how many copies are needed. Pre-registration shows 90 students enrolled, but the bookstore manager says that based on his intuition and some historical evidence; he believes that the distribution of sales may range from 70 to 90 according to the following probabability model.

Demand 70 75 80 85 90
Probability .15 .30 .30 .20 .05

The textbook costs the bookstore $82 and sells for $112. Any unsold copies can be returned to the publisher, less a restocking fee and shipping, for a net fund of $36.

QUESTIONS:

1- How can I construct a table of conditional profits?

2- How many copies should the bookstore stock to achieve highest expected value?

Reference no: EM1333535

Questions Cloud

Give snmp help to monitor a network : What are some of the factors other then network itself that can cause the network to seem slow.

Prosecutor forbes exercises : After the jury verdict is announced, Prosecutor Forbes is questioned by the local media concerning his exercise of the peremptory challenges.

Debt financing and long term expenditures : You're the controller of a firm whose CEO believes which debt must always be employed to finance long-term expenditures because interest is tax deductible and debt does not dilute ownership.

The business strategy and the organizational culture : Discuss the relationship between the business strategy and the organizational culture regarding staffing decisions?

Achieving highest expected value : How many copies should the bookstore stock to achieve highest expected value?

Does the source of information make any difference : Does the source of information make any difference to you? If so, how will you rank the reliability of each of the sources listed?

Disadvantages of an overly consultative approach : If engaged as a consultant on organizational/HR issues - how would you specifically advice or coach a manager who had such a tendency?

Mortgage amortization-standard mortgage rates : Consider a standard mortgage (360 months) with monthly payments and the nominal rate (monthly compounding) of 5.70%. What portion of the payments during first 31 months goes toward interest?

Describing the food codex : Briefly describe the main functions of the Codex Alimentarius.

User Account

All Pages