Reference no: EM131615479

Question: In Example, analyze the effect of change in probability of newsdays to 0.25, 0.5, and 0.25 for good, fair, and poor types, respectively.

Example: The News Dealer's Problem

A classical inventory problem concerns the purchase and sale of newspapers. The newsstand buys the papers for 33 cents each and sells them for 50 cents each. Newspapers not sold at the end ofthe day are sold as scrap for 5 cents each. Newspapers can be purchased in bundles of 10. Thus, the newsstand can buy 50, 60, and so on. There three type "good"; "fair"; and "poor''; they have the probabilities 0.35, 0.45, and 0.20, respectively. The distnbution of newspapers demanded on each of these days is given ,in Table 2.15. The problem 'Is to compute the optimal number of papers the newsstand should purcliase. This will be accomplished by sinmlating demands for 20 days and recording profits from sales each day.