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Agnes has an independent bookstore in downtown and also sells popular magazines. National Geographic is among the magazines that still sells a considerable number of copies. Agnes wants to determine how many copies of National Geographic to order at the start of the upcoming month. (National Geographic is a monthly periodical). The magazine retails at $28.00. Agnes purchases the magazine at $20.00. She will dispose of all of the unsold copies of the magazine at 50% off the retail price, at the end of the month. Agnes estimates that the demand for the magazine during the month is Normal with a mean of 1000 and standard deviation of 250.
(Please do not use excel as I want to understand the process)
a) Suppose Agnes wants to maximize her expected profits from the sale of this magazine. Determine how many copies she should order from the publisher.
b) Suppose Agnes orders 1500 copies of National Geographic. What is Agnes's expected profit?
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