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You are the manager of Tex Electronics and are planning a promotion on a discontinued model of 27 color TVs. The promotion will last 10 days, at the end of which any sets that you ordered but have not sold will be sold to another retailer for $250 each. You must order the sets from the manufacturer before you know what the demand during the promotion will be. Your cost is $350 per set and you will sell them for $600. You estimate that on 20% of the days you will sell 2 sets, 30%of the days you will sell 1 set, and 50% of the days you will sell no sets. (a) What is the expected demand during the promotion? (b) Estimate the optimal number of TVs to order. Simulate order quantities of 7,8,9,10, and 11. In the 10 cells containing the daily demands, use a discrete, general probability distribution. Have one cell that contains the total net profit for the promotion. Based on 1,000 trials, what order quantity maximizes the average net profit? What is the simulated average net profit?
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