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Wally runs a fruit & vege stall Wally’s VegeRama -at the local Sunday market. He can...

Wally runs a fruit & vege stall Wally’s VegeRama -at the local Sunday market. He can buy watermelons from his supplier for $5 each. He can sell watermelons for $10 Each. On any particular Sunday, demand for watermelons follows a Poisson distribution with mean 5. Any watermelons that are not sold on Sunday go bad before the next weekend. Wally’s current policy is to stock 6 watermelons.

  1. How many watermelons should Wally stock to maximise his expected profit? expected profit is 3.0800

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milcah answered 2 months ago
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Wally runs a fruit & vege stall Wally’s VegeRama -at the local Sunday market. He can buy watermelons from his supplier for $5 each. He can sell watermelons for $10 Each. On any particular Sunday, demand for watermelons follows a Poisson distribution with mean 5. Any watermelons that are not sold on Sunday go bad before the next weekend. Wally’s current policy is to stock 6 watermelons. What is Wally’s expected and variance of the profit?
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