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Confidence interval for the expected profit

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Reference no: EM133052437

In August of the current year, a car dealer is trying to determine how many cars of the next model year to order. Each car ordered in August costs $20,000. The demand for the dealer's next year models has the probability distribution shown in the file P15_12.xlsx. Each car sells for $25,000. If demand for next year's cars exceeds the number of cars ordered in August, the dealer must reorder at a cost of $22,000 per car. Use simulation to determine how many cars to order in August. For your optimal order quantity, find o 95% confidence interval for the expected profit. 

Demand

Probability

20

0.30

25

0.15

30

0.15

35

0.20

40

0.20

 

 

Reference no: EM133052437

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