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Total demand for daily perishable item is a random variable with a distribution estimated below. Each item costs 0.60 in materials and labor and then sold for 2.50 each. All unsold items are donated for a 0.20 credit each
Per dozen Probability
10 0.2020 0.3030 0.3040 0.20
1. Discrete distribution: How many should be made daily?
2. What is expected profit for the order quantity in question 1?
3. The mean demand is 25 dozen with a standard deviation of 10.25 dozen. if demand is normally distributed, N(25, 10.25), how many should be made daily?
4. Should you use the discrete distribution order quantity or the normal distribution order quantity?
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