What is the supplier’s expected profit?

Question:
Mary wants to decide on how many copies of a magazine to purchase at the start of the upcoming selling season for her bookstore. The magazine selling price is $28. The supplier sells the magazine to Mary for $20. Mary will recycle all of the unsold copies of the magazine at 75 percent off the selling price. Mary forecast the demand for magazine for be normally distributed with a mean of 100 and a standard deviation of 42.
a) How many magazines should Mary order to maximize her expected profit?
b) What is Mary’s expected profit under the order quantity in part a?
c) The supplier’s production cost per magazine is $7.5 Given the order quantity in part a, what is supplier’s expected profit?
The supplier is thinking of offering a deal to Mary: at the end of the selling season, the supplier will buy back unsold copies of magazines at the price of $15. However, Mary will incur the shipping cost which is $1 per copy.
d) How many magazines should Mary order to maximize her expected profit?
e) What is Mary’s expected profit given her order quantity in part d?
f) Assume the supplier can on average earn $6 on each returned book. Given the order quantity in part d, what is the supplier’s expected profit?

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"