Expected profit maximization

Reference no: EM1314021

The owner of a ski apparel store in Winter Park, CO must make a decision in July regarding the number of ski jackets to order for the following ski season. Each ski jacket costs $54 and can be sold during the ski season for $145. Any unsold jackets at the end of the season are sold for $45. The demand for jackets is expected to follow a Poisson distribution with an average rate of 80. The store owner can order jackets in lot sizes of 10 units.

How many jackets should the store owner order if she wants to maximize her expected profit?

Reference no: EM1314021

Questions Cloud

What should the accumulated depreciation be at december : Carson uses the sum-of-the-years-digits method of depreciation. What should the accumulated depreciation be at December 31, 2008?

Cost of timber sold related to depletion for 1998 : Evaluate the depreciation expense and the cost of timber sold related to depletion for 1998 and determine the cost of timber sold related to depletion for 2009.

Determining building effort-design work and testing effort : Data on distribution of cost for building effort, design work and testing effort.

Information of winners of nobel prize in economics : The winners of the Nobel Prize in economic science were recently announced-who were they? For what contribution to our understanding of economics were they recognized?

Expected profit maximization : How many jackets should the store owner order if she wants to maximize her expected profit?

Explanation of augmented phillip curve model : Using the dynamic augmented Phillip's Curve model (Y/PC/MR), demonstrate the effects of the Following changes. Show both the short-run and long-run effects.

Computation of payback period : Computation of payback period and he company expects, as a result, cash flows of $979,225, $1,158,886

Evaluate the depreciation charge for 2008 : Computation of depreciation under various methods and evaluate the depreciation charge for 2008

Forming an equation : Forming an equation.

User Account

All Pages