How many copies of San Pedro Times should you buy each morning?

How many copies of San Pedro Times should you buy each morning?

You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.25 a copy. You sell a copy of San Pedro Times for $1.00. Daily demand is distributed normally with mean = 250 and standard deviation = 50. At the end of each morning, any leftover copies are worthless and they go to a recycle bin.

a. How many copies of San Pedro Times should you buy each morning?

b. Based on a , what is the probability that you will run out of stock?


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