MHB Help with Profit/Loss: Find Optimal Number of Items to Buy

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To determine the optimal number of candles to buy, the discussion revolves around calculating profit based on varying sales scenarios. The cost per candle is $25, with a selling price of $30, and unsold candles can be disposed of for $20. A user initially calculated a profit scenario for buying 5 candles and selling 4, resulting in a profit of $15. The conversation encourages further exploration of expected profits by analyzing different sales outcomes when buying the same quantity. Understanding how to calculate expected profit based on probabilities is key to finding the optimal purchase quantity.
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I tried working on this question:

the cost of unit for candle is $ 25, selling price $ 30 per item if sold within a week.

unsold to be disposed $20

weekly sales: 3 4 5 6 7 8
probability: 0 10 20 40 30 0

Determine the optimum number of items per week that should be bought by the business owner.

and i got 3, didn't really understood the question. Please help. thanks
 
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intern3t said:
I tried working on this question:

the cost of unit for candle is $ 25, selling price $ 30 per item if sold within a week.

unsold to be disposed $20

weekly sales: 3 4 5 6 7 8
probability: 0 10 20 40 30 0

Determine the optimum number of items per week that should be bought by the business owner.

and i got 3, didn't really understood the question. Please help. thanks

Hi intern3t,

Suppose we buy 5 candles and sell 4.
Then our cost is $5\times \$25$ and we gain $4 \times \$30$, leaving us 1 candle that we dispose for $1 \times \$20$.

So our profit is:
$$\text{Profit} = \text{Revenue} - \text{Cost} = 4\times \$30 + 1\times \$20 - 5\times \$25 = \$15$$

Can you deduce what the profit is if we still buy 5 candles, but could sell 3, 5, respectively 6 candles?

What do you know about calculating an expectation from that?
 
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