Rental for the whole rental period

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Reference no: EM13762150

A small video store currently owns 9 copies of the DVD Im Number 4. Every day, 15 customers (on average) come to the store to rent this movie. If the movie is not on the shelf, they leave and go to a competing store without waiting. The average rental duration is 36 hours. Each rental costs $5 (i.e., $5 per rental for the whole rental period, not per day).

(a) What is the probability that a customer going to the video store will and the movie available?

(b) How much revenue does the store make per day from this movie?

(c) Assume the demand for the movie will stay the same for a sufficiently long period of time, and it costs $50 to purchase a copy of this movie. What would be the payback time for purchasing an additional copy of the movie, increasing the total number of copies owned to 10?

Reference no: EM13762150

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