- #1

megr_ftw

- 71

- 0

## Homework Statement

X=demand for the magazine with pmf

x | 1 2 3 4

p(x)| .1 .2 .4 .3

Shop owner pays $1.00 for each copy of mag. and charges $2.00. If mags. left at end of week are not worth anything, is it better to order two, three, or four copies of the mag.?

I know i need to introduce the random variable Y_k = # of mags. sold, while R_k= the net profit if k mags are ordered.

So do I need to find the probability distributions for k=2,3,4,5 in order to answer the quesiton?? I am just lost on how to start this or how to get the pmf for Y

## Homework Equations

binomial equation or tables?

## The Attempt at a Solution

I don't know how to start this problem but for starters should I make a pmf table for the introduced random variable Y and R??