Dan’s independent book store is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season. the book retails at $28.00. the publisher sells the book to dan at $20.00. dan will dispose of all of the unsold copies of the book at 50% off the retail price, at the end of the season. dan estimates that demand for this book during the season is normal with a mean of 1000 and a standard deviation of 250. what is the quantity that dan should order, to maximize his expected profits? b. what is dan’s order quantity if he wants to ensure a 99% service level? c. what is the chance of a stock out if dan arbitrarily decides to stock 950 books? d. the publisher is thinking of offering the following scheme to dan. at the end of the season, they will buy back unsold copies at a pre-determined price of $17.00. however, dan would have to bear the costs of shipping unsold copies back to the publisher at $1.00 per copy. what is the quantity that dan should order, to maximize his expected profits now?
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